YouTube shrugs off advertiser boycott, drives Alphabet to 21% Q2 revenue spike

YouTube
With 1.5 billion monthly viewers, and an average per-viewer commitment of 60 minutes per day, YouTube’s sustained growth is undeniable.

Shrugging off a much-publicized advertiser boycott over the spring, YouTube was instrumental in driving up revenue for parent company Alphabet by 21% in the second quarter to $26 billion. 

Alphabet’s advertising revenue rose 18% to $22.7 billion. 

Google’s mobile search ad business got part of the credit. But now touting 1.5 billion monthly viewers, and an average per-viewer commitment of 60 minutes per day, YouTube’s sustained growth is undeniable.

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“We believe online video is the biggest online ad growth driver and YouTube is the premier vehicle to play that trend,” said Jefferies analyst Brian Fitzgerald in a note to analysts. “Paid clicks (the best indicator of a robust ad ecosystem) grew 61% across Google-owned sites, an impressive figure we attribute (alongside mobile search) to an explosion of lower-cost YouTube ads flowing through Google's ad platform. The well-publicized advertiser boycott was not a factor.”

In April, PepsiCo, Wal-Mart Stores, Starbucks, JPMorgan Chase, AT&T, Johnson & Johnson, and Lyft were among the major brands boycotting YouTube, complaining that their ads were showing up on the video programming of undesirable creators, such as hate-speech mongers.

RELATED: YouTube TV adds 10 more markets, 9 with live local broadcast

Google responded to the so-called brand security crisis by hiring workers to monitor and flag content. And YouTube instituted a new policy that dictated that ads would only be placed on YouTube creator channels once they received 10,000 views across their videos. 

The policy, YouTube said, “allows us to confirm if a channel is following our community guidelines and advertiser policies.”

Meanwhile, YouTube is finally making traction in its effort to join the professional grade content ecosystem. Its virtual MVPD service, YouTube TV, launched into 10 more markets this week. 

Analysts say YouTube could still face headwinds from the boycott. But the strong second quarter shows that, outside of Facebook, YouTube remains an essential channel for advertising through online video.

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