The final quarter of 2025 revealed a divergence in performance across Big Tech platforms, with Amazon emerging as the clear outperformer against expectations while YouTube fell notably short, according to analysis from WARC Media.

WARC Media’s Earnings Debrief is a new quarterly series that reviews the financial releases of Big Tech and compares their ad revenue performance against WARC Media’s quarterly global ad spend forecast data, to provide a current round-up of their ad spend.

James McDonald, Director of Data, Intelligence & Forecasts, WARC, commented: “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 misses forecast 

YouTube delivered the most significant underperformance versus WARC’s Q4 2025 benchmark, missing forecasts by 9.3 percentage points (pp). While the result appears disappointing on the surface, there were several compounding factors at play.

Political advertising spend during the US Presidential Election had driven CPMs higher than average, though the degree to which the cooling off occurred in Q4 2025 was notably more marked.

Engagement with YouTube remains strong overall, but conventional in-stream advertising may not provide the future growth engine.

Shorts – a format developed to counter consumption on TikTok and Instagram – now average more than 200 billion daily views, and in several major markets, including the US, revenue per watch hour has overtaken that of traditional in-stream formats. However, despite rising consumption, Shorts contribute a relatively small share of overall ad revenue due to evolving monetisation frameworks.

Further, new data show that approximately a third of YouTube’s total revenue – some $20 billion – now comes from subscriptions to its ad-free YouTube Premium service, which may act as a headwind for future ad revenue growth.

Mixed fortunes for Google as AI disrupts discovery 

Google’s advertising performance was more mixed. The Google Display Network declined by 1.6 per cent in Q425 and 1.9 per cent during 2025 as a whole, in both cases roughly one point behind forecast. This reflected softer pricing and a shift in advertiser budgets towards higher-value formats, including YouTube and Google-owned inventory accessed via Performance Max and Demand Gen campaigns.

As spend migrates away from the open web, display’s relative contribution to Alphabet’s bottom line continues to stagnate. The company noted that income from AdSense fell, while AdMob (i.e. in-app ads) receipts grew but not enough to stymie overall decline.

Meanwhile, Google Search remains structurally resilient, coming in ahead of forecast during the quarter but roughly par (+0.8pp) for the full year. Despite intensifying competition from generative AI alternatives, Google’s integration of AI into search experiences appears to be sustaining engagement and query volumes, reinforcing its monetisation advantage. That said, the price is a near doubling of capital expenditure.

Meta falls just short of forecast

Though still just behind forecast (-1.4pp), Meta delivered a more robust fourth quarter, supported by an accelerating use of AI across its ad targeting and measurement suite, which has driven both higher ad impression volumes (+18 per cent) and increased pricing (+6 per cent). The scale of Meta’s AI infrastructure investment could place pressure on margins if returns take longer to materialise.

Strong growth in video engagement – particularly across Reels on Instagram and Facebook – has reinforced advertiser appetite for video placements, which typically command higher CPMs.

Meta reported that Reels watch time in the US – its largest market – rose by more than 30 per cent in Q4. The format is a core part of Meta’s strategy to retain share of wallet against competitors, however, the monetisation rate for Reels remains lower than that for traditional in-feed ads.

Amazon flexes growing full-funnel muscle  

Amazon was the standout performer during the quarter, surpassing expectations by 5.5pp. Although advertising still represents less than 10 per cent of Amazon’s total revenues, it now ranks as the world’s third-largest digital advertising platform globally. Further, Madison & Wall estimates that advertising contributed essentially all of the operating income generated by the company’s retail sector last year.

Retail media’s ability to link ads directly to purchases, supports premium pricing across Sponsored Products, Brands and Display. New WARC Media ad spend data – derived from monitoring by Walrus Intelligence – shows that some 81.5 per cent of Amazon’s ad income (almost four fifths of growth) is derived onsite, though this is down slightly from the previous year.

The rollout of advertising across Prime Video has further strengthened Amazon’s full funnel proposition, adding high value, scaled and targeted inventory. Prime Video now reaches an estimated 315 million monthly ad-supported viewers globally (compared to Netflix’s 190 million), significantly expanding Amazon’s video CPM opportunity.

Amazon’s rapid deployment of AI-driven campaign tools and predictive targeting further strengthens its ability to tie ad spend to measurable conversion across its ecosystem.

Overall, Q4 2025 highlighted a market increasingly rewarding platforms that combine scale, data and demonstrable outcomes – a dynamic that continues to favour Amazon, even as others recalibrate their growth stories.

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Categories: Articles, Markets, Research

Tags: Amazon, meta, WARC, youtube