Amazon beats ad revenue forecasts by 5.5% while YouTube misses by 9.3%: WARC

New Delhi: WARC Media has released the first edition of its quarterly Earnings Debrief, comparing the latest financial results of major technology platforms with its global advertising spend forecasts for the fourth quarter of 2025. The analysis indicates diverging revenue momentum across leading platforms, with Amazon exceeding expectations while YouTube recorded the largest shortfall.

According to the report, YouTube delivered the most significant underperformance against WARC’s Q4 2025 benchmark, missing forecasts by 9.3% points. Meta’s performance remained slightly below forecast by 1.4% points but showed stronger quarterly momentum, while Amazon surpassed expectations by 5.5% points.

The Earnings Debrief reviews Big Tech financial releases against WARC Media’s quarterly global ad spend forecast data to provide a current overview of advertising revenue trends.

James McDonald, Director of Data, Intelligence & Forecasts at WARC, said, “WARC Media’s Earnings Debrief cuts through the headline numbers to show what’s really driving performance across the major ad platforms.

“By refreshing forecasts quarterly, WARC’s benchmarks give clients a timely read on where growth is accelerating, where it’s stalling, and why, from Amazon’s retail media momentum and full-funnel scaling to YouTube’s Shorts monetisation gap and Google’s AI pivot. In a fast-moving market, this recency and context is essential for understanding trajectory and informing confident investment decisions.”

YouTube’s advertising revenue performance fell 9.3% points short of WARC’s benchmark. The report notes that political advertising around the US presidential election had pushed CPMs higher earlier in the year, with a more pronounced cooling in the final quarter of 2025. Engagement levels on the platform remain high overall, though traditional in-stream advertising is not expected to be the main growth driver going forward.

Shorts, introduced to compete with short-form video platforms, now generate more than 200 billion daily views. In several major markets, including the US, revenue per watch hour has surpassed that of traditional in-stream formats.

However, despite increased consumption, Shorts contribute a relatively small share of overall advertising revenue due to evolving monetisation structures. Around a third of YouTube’s total revenue, approximately $20 billion, is now attributed to subscriptions for the ad-free YouTube Premium service, which may affect future advertising growth.

Google’s broader advertising performance was mixed. The Google Display Network declined by 1.6% in the fourth quarter and by 1.9% for 2025 overall, in both cases about one percentage point below forecast. This reflected softer pricing and shifts in advertiser budgets towards higher-value formats such as YouTube and Google-owned inventory accessed through Performance Max and Demand Gen campaigns.

As spending moves away from the open web, display’s contribution to Alphabet’s revenue continues to stagnate. Income from AdSense declined, while AdMob revenues grew but not enough to offset the broader fall.

Google Search remained relatively resilient, performing ahead of forecast in the quarter and roughly in line with expectations for the full year, at 0.8% points above forecast. Despite growing competition from generative AI tools, Google’s integration of AI into search appears to be sustaining engagement and query volumes, although this has been accompanied by a near doubling of capital expenditure.

Meta’s advertising revenue came in 1.4% points below forecast for the quarter. The company reported increased use of AI across ad targeting and measurement, contributing to higher ad impression volumes, up 18%, and pricing, up 6%. Investment in AI infrastructure could place pressure on margins if returns take longer to materialise.

Video engagement continued to grow, particularly through Reels on Instagram and Facebook, reinforcing advertiser demand for video placements, which typically attract higher CPMs. Meta said Reels watch time in the US rose by more than 30% in the fourth quarter, though monetisation rates remain lower than traditional in-feed advertising.

Amazon recorded the strongest performance relative to forecasts, exceeding expectations by 5.5% points. While advertising still accounts for less than 10% of Amazon’s total revenue, the company is now the world’s third-largest digital advertising platform. 

Industry estimates suggest advertising contributed most of the operating income generated by Amazon’s retail division in the past year. Retail media’s ability to connect advertising directly to purchases supports premium pricing across Sponsored Products, Brands and Display formats.

WARC Media data shows that 81.5% of Amazon’s advertising income is generated on its own platforms, accounting for nearly four-fifths of growth, though this share has declined slightly from the previous year. 

The introduction of advertising on Prime Video has expanded Amazon’s full-funnel advertising offering, with the service reaching an estimated 315 million monthly ad-supported viewers globally, compared with Netflix’s 190 million. The company’s use of AI-driven campaign tools and predictive targeting has strengthened its capacity to link advertising spend to measurable conversions.