By Krystal Scanlon  •  February 10, 2026  •

Ivy Liu

It’s a move that partly hinges on Youtube Shorts, the short-form format built to compete with TikTok and Meta’s Reels. Shorts gives YouTube the inventory and user behavior patterns that performance marketers expect, helping the platform argue it can deliver both brand-scale reach on TV screens and response-driven outcomes inside the same ecosystem — or the middle of the funnel. Paid social media expert Shamsul Chowdhury said he has heard this narrative from Google reps, adding that Google has long struggled to navigate the so-called “messy middle.” Demand Gen, he noted, was intended as the company’s solution.

“If Google can own mid funnel like it owns bottom funnel, they know it will unlock more dollars because brands who are savvy know that the full funnel needs to be activated,” he said.

Part of that case rests on measurement. Reps have been talking up Platform Comparable Conversions, a metric introduced in early 2025 that’s become a recurring talking point in those meetings. 

“It factors in view through conversions more and isolates Demand Gen/YouTube campaigns from other parts of the Google ecosystem,” said Chris Rigas, vp of media at Markacy. “If a customer sees a YouTube ad and then converts on a search ad, the old system would credit search only, now platform comparable conversions gives a conversion to Demand Gen/YouTube also.”

The sharper sales posture speaks to a bigger pressure point. AI is swallowing capital by the billions and warping the economics of search — long the company’s financial engine. In that context, YouTube isn’t just a growth story. It’s being positioned as a revenue release valve, tasked with shaking loose incremental dollars.

So far those efforts appear to be working. When talking about their YouTube spending for 2026, four ad execs Digiday spoke to for this story confirmed that their clients expect to increase it this year. Rigas, for example, noted that Markacy’s clients typically spend about 10% to 15% of their total media mix on YouTube, and are expected to increase it to between 15% and 20% this year. Mile Marker’s vp-biddable COE Monica Shukla noted that YouTube is a “cornerstone” of her team’s clients media mixes, adding that investment in the platform has followed a “consistent upward trajectory, with a significant number of clients realizing double-digit year-over-year growth in channel allocations”, though she declined to share specific figures.

Some of that money will come through the joint business plans — media trading deals — the platform’s ad execs are currently trying to strike with investment chiefs. The structures reward agencies that consolidate more video, performance and cross-channel budgets within Google’s buying platform DV360, effectively wiring YouTube into plans before channel decisions are even finalized.

YouTube’s presence in these negotiations is not new. It has long featured in broader DV360 dealmaking. What’s changing is its weight. The platform is increasingly the anchor asset that helps justify the scale of those commitments, giving agencies a mix of TV-style reach and performance inventory within the same commercial framework.

Positioned that way, YouTube strengthens DV360’s role as a conduit for ad dollars at a moment when Amazon is using its own demand-side platform to capture a larger share of video budgets.

Still, the transition won’t be frictionless. Of the ad execs Digiday spoke with, at least four confirmed that the majority of their clients’ YouTube spend runs through Google Ads, rather than DV360, thanks to its ability to link it more directly to search campaigns as well as the subsequent platform costs that come with spending through DV360. 

Shukla highlighted the platform as “highly effective for auction-based buying due to its native ease of execution and cost-efficiency.” Echoing this point, Go Fish Digital’s president, David Dweck, noted the advantage of not having platform costs associated with Google Ads. “It enables seamless cross-channel measurement with search and allows the team to better activate YouTube as part of Demand Gen or Performance Max campaigns,” he added.

YouTube’s ascent 

Over the last 21 years, YouTube has become the biggest streaming platform globally — verified by Nielsen as the number one U.S. streamer for the past three years.

Still, while YouTube has successfully brought more eyeballs to its platform (more than one billion hours of content consumed daily), and paid out more than $100 billion to creators since 2021 according to its own figures, it’s never been clear about the business’ profitability.

For years, parent company Alphabet has given observers a glimpse into YouTube’s ad revenue — the latest being YouTube’s $60 billion in annual revenue for 2025 — a total that includes both advertising and subscriptions — a $10 billion increase on 2024.

It’s clear YouTube wants to be premium TV, a short-form power house and creator economy engine, all at once. It’s already won user attention, but it wants the profit margins to match. Its Netflix Sunday Ticket and Oscars global exclusivity deals help it prove legitimacy up market. But it can’t deny what made it a streaming giant – creator content. While YouTube has monetized Shorts since February 2023, Meta’s Reels has already achieved a $50 billion annual run rate. Get these efforts right, and it’ll have a chance at achieving the margins platforms like Netflix does.

If YouTube can successfully balance those ambitions while turning attention into sustainable revenue, YouTube won’t just compete with broadcasters and social platforms anymore. It will continue to rewrite what a modern video platform actually is.

Google did not comment on the record but sent over contextual information on AI monetization and the state of YouTube’s ad business.