YouTube ads have become a major financial driver, raking in $10.4 billion over just a three-month period. This represents a significant increase compared to $9.2 billion in Q4 2023, marking a 14% rise.

This surge in revenue is partially attributed to increased spending on ads by political parties during the 2024 US elections, which saw a considerable rise in views for election-related content on the platform.

Alphabet’s financial disclosures show that while YouTube’s ad revenue contributed to over $10 billion, it remains a fraction of the company’s overall earnings, which totaled over $96 billion in the same quarter.

To mitigate user discomfort with ads, YouTube offers a Premium subscription for $14/month, which is gaining traction among users seeking an ad-free experience. Alphabet reported a rise in subscription revenues from $10.8 billion to $11.6 billion year-over-year.

Finally, Alphabet’s executives believe that advancements in AI could enhance ad performance even further, allowing brands to achieve better returns on their investments.