YouTube affected by the rivalry with TikTok and Apple’s changes
YouTube is being affected by the rivalry with TikTok and Apple’s changes. And this causes slowdown in sales of the world’s largest video service.
YouTube affected by TikTok and Apple
YouTube shares fell about 3% after the company shared first-quarter results. This could be due to the popularity of YouTube’s rival TikTok and bans on targeted advertising on iPhones. But how exactly does this affect the video platform?
Apple’s changes affect YouTube
In the past year, Apple Inc. has put social media companies in check by imposing strict restrictions on third-party ads on iPhones. That hit Meta Platforms Inc, which operates Facebook and Instagram. Whereas it left Google relatively well because it relies less on that form of targeted ads.
But that hasn’t been the case for YouTube, Google previously mentioned that Apple’s privacy changes had little impact on its video site. It is now known that YouTube saw a slowdown in the growth of direct response ads. Indeed, YouTube advertising was the weakest link in Alphabet’s first quarter results, up just 14%. A year earlier, an increase of 48% was recorded in the same quarter. Also, YouTube is being affected by TikTok.
TikTok, the other YouTube problem
There is another threat to YouTube that affects its profits and that is TikTok. The popular video app has challenged YouTube’s supremacy in the online creator space. Also to Meta to allocate resources to Facebook and Instagram . Especially since most young people spend a lot of time on TikTok.
YouTube launched Shorts to compete with TikTok and content creators were paid to post videos in this format. Now, YouTube is starting to test ads within Shorts. Google’s head of sales Philipp Schindler told investors that the company was encouraged by initial feedback and results from advertisers.
Google claims that Shorts receives 30 billion views per day, which is a fourfold increase over the previous year. But, that increase takes some of the traffic away from YouTube’s longer videos, where he makes all the money. So, YouTube is working to bridge the gap between its core business service and Shorts’ to beat TikTok.
Google executives attribute some of YouTube’s problems to Russia’s invasion of Ukraine. Especially since a pullback in spending was expected across Europe. However, during the quarter, the company’s global sales in Europe and the Middle East grew 19%, compared to 33% a year earlier.
Google spokespersons accepted that Apple’s changes were indeed affecting YouTube’s business. But, they avoided talking about TikTok in every possible way, this may be because YouTube does not want to show weakness in that regard. Meta has talked about how TikTok is grabbing people’s attention.