5 Equations in 5 Days: YouTube Revenue

This is part of a mini-series illustrating how to think about estimation prompts for Google interviews. It is also a way to build your logic instincts.

Instructions:

1. See prompt below

2. Think about how you would estimate the answer

3. Identify the variables in your thoughts

4. Derive a simple equation

What you should avoid:

1. Overthinking

2. Trying to get it perfect

Now let’s dive in:

What is the problem:

How much revenue does YouTube make per day?

What are the key elements:

• # ads seen

  • function of # videos viewed

    • # people watching per day

    • # videos watched

    • # ads per video

• avg $ of ads

• Note: If we assume YouTube TV we could add in subscription revenue

• Alternatives include:

  • Hours watched rather than videos watch

  • Ads per hour rather than ads per video

What are the variables?

• X = # ads seen per day

  • A = # people

  • B = # of videos (or hours watched)

  • C = avg ads per video (ads seen per hour)

• Y = $ per ad

What’s the equation

=X*Y

or

= (# ads seen per day) * ($ per ad)

If you want to breakdown how you came to ads see per day

• where X = (A * B * C)

Another POV on this Prompts

Here is I Got An Offer’s Take on this question. They go through the whole answer. I don’t agree on everything they suggest as a process but for the calculation, they hit on the same points, if worded differently.

Further Reading

Today we only care about coming up with an equation. If you want more on how to come up with the numbers to put in your equation, read more here.