Q1 numbers looked pretty good overall for Alphabet – the parent company of YouTube and Google. But under the surface, industry-wide troubles with ad revenue remain. Ad sales at YouTube declined 2.6% year over year to $6.69 billion in Q1.

Why it's important: Dropping for the third quarter in a row, the result shows how soft the advertising market remains, despite an increase in premium YouTube subscriptions. This would be a good time thank all of our loyal Nashville Briefing sponsors! 

By the numbers: Although ad revenue was down, YouTube’s overall revenue actually rose 9% YoY to $7.41 billion in Q1 2023. It gained revenue from paid subscriptions, including YouTube TV, YouTube Music and YouTube Premium, and overall beat Wall Street forecasts. Meanwhile, it also recorded $2 billion of charges related to the 12,000 job layoffs announced in January and wrote off $564 million in office space reductions.

What are they doing? Basically, aiming to get more people using the YouTube platform while they wait out the ad market’s return. The team has been pushing Shorts to compete with TikTok, and says they see signs of "stabilization" in ad revenue. Plus, YouTube TV just announced it was offering NFL Sunday Ticket for the upcoming football season, hoping to drive new subs.