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EMARKETER

YouTube Shorts power up creative ads with AI as revenues match traditional videos

Article by Grace Harmon  |  Jul 24, 2025
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YouTube Shorts power up creative ads with AI as revenues match traditional videos
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Topics
Digital Ad Spending
Artificial Intelligence (AI)
Digital Video
United States

The news: In the wake of Google’s impressive earnings report, YouTube is getting more creative AI tools on YouTube Shorts for both creators and advertisers.

YouTube added an image-to-video generative AI (genAI) tool to Shorts, which can turn a photo into a 6-second video, powered by Google’s Veo 2. It also introduced AI-powered tools that resize ads to fit Shorts’ format.

AI advantage: YouTube is betting that AI will supercharge both content creation and ad performance on Shorts.

  • By automating tasks like video generation and ad resizing, YouTube lowers the barrier for influencers and marketers to scale output quickly.
  • This could also help establish the platform as an all-in-one creative suite, where users can create, edit, and publish AI-enhanced content without leaving the Google/YouTube ecosystem.

Ad spike: YouTube is focusing AI investments on its moneymaker and engagement engine, Shorts. Its success in selling ads on Shorts—YouTube ad revenues hit $9.8 billion in Q2—are a sign that short-form video is not only popular, it’s incredibly profitable.

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