YouTube Continues to Draw Major Ad Dollars, but Retailers Are Cutting Back

The decline doesn't mean advertisers are finally leaving the embattled platform

Major retailers have sliced their YouTube spend by 20%. Getty Images

Despite the scandals that have befallen YouTube lately, the platform is still one of the most profitable online. But now, one advertising category—retail—is pulling back its spend on the platform.

That’s according to research out today from the the ad-intelligence platform MediaRadar, which released an analysis comparing media buyers’ behaviors across YouTube’s curated lineup of “preferred” channels for the first five months of 2018 and 2019. The study found that those in several categories, especially the tech and entertainment sectors, have consistently bumped their YouTube spend, but major retailers—including Macy’s, Gap and Sears—have sliced theirs by 20% overall.

Among the 200 top retail spenders in the category, only 13% of them—26 companies—increased their spend year over year.

However, the retail pullback doesn’t necessarily indicate that advertisers are finally starting to turn on the embattled platform. As marketers told Adweek earlier this month, despite the many controversies that YouTube has weathered, it would take nothing short of a mass exodus for them to consider leaving the platform.

“We don’t think retail’s decline is a sign that YouTube has an issue,” said Todd Krizelman, MediaRadar’s CEO. “We actually believe that this is more of an issue with retail.”

Retailers, he continues, have been quietly cutting back on all of their operations, both on the web and off. This year has seen the shuttering of roughly 5,000 stores in the U.S. alone, according to a recent CNBC report. The decrease in ad spend, Krizelman said, is an extension of this trend, driven in part by the by ecommerce giant Amazon, which raked in roughly $10 billion in sales last year alone.

Krizelman pointed out that another player—direct-to-consumer brands—have been quietly sweeping the commerce market as well, by offering consumers the chance to buy everything from toothbrushes to bedsheets to eyeglasses, without requiring that they enter a Target or a Macy’s to do so.

@swodinsky Shoshana Wodinsky is Adweek's platforms reporter, where she covers the financial and societal impacts of major social networks. She was previously a tech reporter for The Verge and NBC News.