Big Changes Coming to YouTube Ads

• YouTube is considering implementing pause ads, a new format that may interrupt video playback, causing potential user dissatisfaction.
• Alphabet’s first-quarter earnings for 2024 reveal a significant increase in revenue from YouTube ads, partially attributed to crackdowns on ad blockers and strong subscription growth.

Alphabet, the company that owns YouTube, recently issued an alert that may displease some of their users. They warned about an impending change that could alter YouTube in ways they don’t approve.

YouTube recently reported that their pilot experiment of an experimental new ad format, where ads suddenly pop-up when viewers pause videos, garnered strong traction – possibly becoming standard practice going forward.

“For YouTube advertisers, increasing brand lift is one of the core goals,” said Alphabet Senior Vice President Philipp Schindler during a recent earnings call. “In Q1, we saw strong traction from the introduction of a pause ads pilot on connected TVs, a new non-interruptive ad format that appears when users pause their organic content. Initial results show that pause ads are driving strong brand lift results and are commanding premium pricing from advertisers.”

The pilot was first announced in May 2016, alongside the launch of YouTube Select’s 30-second unskippable ad format allowing advertisers to place ads on popular videos.

YouTube’s move to expand paused videos advertising comes after they announced to users just last week that they have tightened restrictions on third-party ad blocking applications that began last year, effectively barring these from watching any more than three videos at one time on its website.

“Viewers who are using these third-party apps may experience buffering issues or see the error ‘The following content is not available on this app’ when trying to watch a video,” said YouTube in a community post announcing the change. “We want to emphasize that our terms don’t allow third-party apps to turn off ads because that prevents the creator from being rewarded for viewership, and Ads on YouTube help support creators and let billions of people around the world use the streaming service.”

YouTube‘s crackdown on ad blockers and expansion of advertisements seems to be increasing Alphabet’s profits by billions of dollars each quarter.

Alphabet revealed in their first-quarter earnings report for 2024 that YouTube ads brought in approximately $8 billion during this quarter – up significantly year over year from when $6.6 billion were earned during that same timeframe last year.

Google subscriptions, platforms and devices revenue saw an 18% year-on-year growth due to strong YouTube subscription growth; Schindler noted this fact on their earnings call as one of the reasons behind it. These subscriptions allow for uninterrupted content streaming on YouTube without ads interrupting playback.

Alphabet also saw a 15% year-on-year revenue boost, earning over $80.5 billion during its first quarter 2024.