YouTube’s ad revenue is slowing as TikTok and Netflix look to overtake the platform, WARC Media reveals.
YouTube’s annual revenue, which includes premium subscriptions, exceeded $60bn in 2025 for the first time – $40bn of which was attributed to advertising, according to WARC Media.
It has reached over 2.6 billion users, with short-form video driving engagement for the platform, especially among gen Z, which is its most valuable audience.
The average YouTube user spent 58 minutes per day on the platform in 2025, up from 48 minutes in 2024 – with India the most active region with 500 million users.
YouTube viewing is increasingly occurring on larger screens – connected TV (CTV) makes up 45% of total watch time in the US, with average session lengths over 45 minutes and completion rates of 95% or higher.
However, its ad business growth is slowing, as pressure from rivals such as TikTok and Netflix mounts.
While the Google-owned platforms global ad revenue global ad revenue grew 11.7% year-on-year (YoY) in 2025 to $40.4bn, it is still a contraction from 2024, which had a YoY growth rate of 14.7%.
YouTube’s YoY growth is forecast to decelerate further to 7% this year ($43.2bn) and 7.9% by 2027 ($46.6bn).
The competition for YouTube is evident, as many brands are leaning towards investing their ad dollars into platforms like TikTok for social commerce. TikTok, if it continues to grow at its current rate, could overtake YouTube on ad revenue by 2028.
Netflix has also become a key competitor to YouTube with is ad-tier subscription service and is expected to pull ahead of YouTube in the next 18 months.
Alex Brownsell, head of content at WARC Media, said: “Rising consumption of video content on YouTube, and in particular on TV screens, has not yet translated into the kind of year-on-year ad revenue growth we see elsewhere in the digital ad market.
“YouTube has been less successful than rivals such as TikTok in its attempts to persuade marketers of its role in driving lower-funnel outcomes, hence its growing focus on winning a greater share of TV budgets.”
A trusted environment
YouTube ranks consistently among the most preferred and trusted media brands for global marketers, with Kantar ranking them top for the third consecutive year; and second for brand safety, behind Netflix.
The platform’s strength is in local, interest-led, creator driven content. It has a broader content mix than other platforms, spanning music, entertainment, gaming, news, education, children’s content, and an increasingly significant podcast offering.
YouTube shorts are the platform’s vertical video format, which now has an average of over 200 billion daily views globally. Ad revenue from this format is also rising. In major markets like the US, revenue-per-watch-hour for shorts has overtaken traditional in-stream formats.
But generally, ad performance varies depending on the ad format. In-feed ads were found to deliver the strongest click-through effectiveness, according to Store Growers research.
Click-through rates ranged from 1% to 3%, which is above the all platform average of 0.65%. Non-skippable in-stream ads generate less than 0.3% click-through rates, making them more suitable for awareness campaigns than to direct response.
Gen Z is the platform’s most valuable and commercially active audience, with half (51%) of men and 43% of women making a purchase after watching an ad on the YouTube shorts.
YouTube viewers watched more than 700 million hours of podcast on YouTube via a TV screen in a month – up 70% YoY and overtaking Spotify.
It has even gone ahead of Reddit to become a social platform source for LLMs like ChatGPT and Gemini to site as a source in their answers.
