YouTube ad growth slows as rivals gain ground

As revenue growth slows, the Google-owned service is facing increasing competition from TikTok for performance budgets

YouTube generated more than $40bn in advertising revenue last year, cementing its position as one of the world's largest media platforms. But as revenue growth slows, the Google-owned service is facing increasing competition from TikTok for performance budgets and Netflix for premium video advertising, according to WARC Media.

The latest Platform Insights: YouTube report estimates YouTube's advertising revenue reached $40.4bn in 2025, up 11.7 percent year on year. While total platform revenue exceeded $60bn for the first time, ad growth is forecast to slow to 7.0 percent this year and 7.9 percent in 2027, signalling a maturing business and a more competitive marketplace.

Growth shifts from scale to engagement

YouTube now reaches around 2.6 billion monthly users, who spend an average of 58 minutes a day on the platform, up from 48 minutes in 2024. The increase reflects deeper engagement rather than significant audience growth.

India remains YouTube's largest market with 500 million users, followed by the US with 254 million. Indonesia and Brazil each have around 150 million users.

Alex Brownsell, Head of Content, WARC Media: "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."

TV becomes YouTube's growth engine

One of the report's most significant findings is the shift in viewing behaviour. Connected TV now accounts for 45 percent of YouTube watch time in the US, making television the platform's fastest-growing screen. Average viewing sessions exceed 45 minutes, with completion rates of at least 95 percent.

At the same time, YouTube Shorts continues to reshape consumption. The short-form video format now generates more than 200 billion daily views worldwide, and in several major markets revenue per watch hour has overtaken traditional in-stream video formats. The report suggests further monetisation will depend on advertisers adapting creative strategies to Shorts.

Competition intensifies

While YouTube remains central to advertisers' media plans, WARC warns that competition is increasing across multiple fronts. TikTok continues to attract performance marketing budgets through social commerce and could surpass YouTube's advertising revenue by 2028 if current growth trends continue.

Netflix is also emerging as a stronger rival as its advertising-supported subscription tier gains traction with both advertisers and viewers, positioning the streaming platform to capture a larger share of premium video budgets.

Trusted by marketers, valuable for Gen Z

Despite slowing growth, YouTube continues to rank as marketers' most trusted advertising platform, according to Kantar, and ranks second only to Netflix for brand safety.

The report also highlights YouTube's commercial influence among younger audiences. More than half, or 51 percent, of Gen Z men and 43 percent of Gen Z women said they had made a purchase after watching an advertisement on YouTube Shorts, reinforcing the format's role as a commerce channel rather than simply an awareness platform.

Beyond advertising, YouTube continues to broaden its role in digital media. It has overtaken Spotify for podcast viewing, with more than 700 million hours of podcasts watched on television screens in a single month, and has also surpassed Reddit as a source of content used by large language models, extending its value as a discovery platform for brands.

For marketers, the report suggests YouTube remains an essential advertising channel. However, future growth will depend less on expanding reach and more on adapting creative, commerce and connected TV strategies in an increasingly competitive video market.