Announcement of an Ads Pilot on Udemy

Dear Instructors,

Today (on July 30th) Udemy announced our Q2 earnings. As part of that announcement, we highlighted four key areas all designed to position Udemy as a leader in AI learning and skills acceleration space, return our consumer business to growth and continue to grow our B2B business.

Increasing our emphasis on subscription products;
Expanding our partnership ecosystem and third-party channels;
Executing comprehensive global market activations; and
Positioning Udemy as the leading AI-powered skills acceleration platform.

As part of the drive towards returning the consumer business to growth, we also announced a new pilot program around advertising within our free courses. Ad-supported content has long been a major revenue driver for content providers like YouTube, Duolingo and Spotify, and we believe this could be a new revenue stream for Udemy. The pilot program is only for free courses at this stage and we will use the information we gather to better understand the opportunity size for Udemy.

We wanted to take this opportunity to dive into this element of the earnings announcement a little more as we realize this information is not business as usual.

Why are we doing this?

As we all agree, the goal is to grow our consumer business, grow the overall Udemy business, and in turn grow your business alongside it.

One vehicle to do this (not the only) is by diversifying our revenue sources. We believe that ads could be a new revenue stream for Udemy but we need to test this, understand the user journey, learner experience and more - this is why we are running a pilot program to learn on free courses only at this stage as we believe that is the lowest risk.

Where will ads be shown?

For this pilot, ads will be shown in our free courses only. The team will be exploring the best way to insert ads without interrupting the course-taking experience. We will be testing:

Pre-roll ads: Short ads that appear before a course video starts - these are ideal for introducing new learning paths, featured instructors, or relevant skill bundles.
Mid-roll ads: Ads shown during a natural break in the course, used sparingly to keep the learning flow, and often tailored to what the learner has just covered.
End-roll ads: Ads that appear after a lesson or section wraps up - these are great for recommending next steps, related courses, or certification programs.

Will there be a change to instructor payments?

As this is a trial limited to free courses, which already do not generate instructor revenue, there will be no revenue share at this time. Any revenue earned during the trial will be reinvested into improving the core elements of the Udemy platform that benefit both instructors and learners, including AI-powered content tools, a better user experience, broader global accessibility, and platform performance.

As we learn and explore other options we will be relying on our customers and you, our instructors, to help be part of the future discussion and guide us as we evolve different paths and options.

We hope that you take this message in the spirit which it was intended, which is with trust and transparency. If you have questions please reach out.

Thank you as always for being a valuable partner.

The Udemy Team

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Comments

TonyAlicea

I think this makes a lot of sense @RyanJaress. A revenue source for Udemy that takes nothing from instructors is great!

I’m sure instructors will want ad share (which might drive a higher number of free courses), but free courses generally build a student base to market to so instructors still get something from them for now.

AlexGenadinik

Ads do earn more money, especially in the enterprise/technology niche and many of Udemy's verticals.

Coach.Hector

Hi @RyanJaress

I’d like to share my thoughts with openness and a constructive spirit.

Personally, I don’t offer free courses (at least for now), because I believe that if there’s real work behind something, there should be fair compensation. We’re not talking about a free PDF to promote a course — we’re talking about complete courses that require planning, recording, and support.

I understand this pilot with ads is meant to explore new revenue streams, and I think it’s worth testing if it affects the learner experience.

That said, I believe that if there are ads = there’s revenue = there should also be payment for instructors, even if symbolic at this early stage.

For the future, I’d like to suggest three things:

Transparency on ad revenue: How much is being generated?
A fair revenue share model, if ads are expanded to paid courses.
An opt-out option, for instructors who don’t want ads in their content.

Thanks for listening and for keeping this dialogue open.

PuneetGupta453

This is what I’ve been saying all along… definitely a move in the right direction.

ThomasMitchell

I just ran this idea past a few friends of mine in the IT space. Feedback was overwhelmingly negative, particularly for paid courses. They were more open to ads in/around free courses but all of them were adamant that they “were out” if Udemy starts making them watch ads after they’ve paid for courses.

ThomasMitchell

If we’re gonna do this, especially for paid courses, instructors should be able to filter out competition from ads, because while I may be ok advertising someone else’s course in a different vertical, I DO NOT want to be advertising my compeltitors’ courses. That would be absurd.

Mufaddal

This sounds promising . Thank you! .

Btkrausen

Almost all these users already pay for services where ads are run. Cable TV, Netflix, Disney+, etc. Most of these have tiers with ads and tiers without ads. I'm assuming Udemy will follow suit. Offer courses or a subscription for a cheaper price that is supported by ads, or a subscription price at a higher price for no ads.

Btkrausen

Good point about advertising other courses. I mostly assumed they would be businesses that want to advertise to students learning content related to their product, webinar, upcoming event, etc.

Taking an AWS Certification course? Check out this ad for AWS re:Invent coming in November. Learning about AI? Check out Claude's latest model that promises xyz returns.

Mehul82

@RyanJaress Thanks for sharing this initiative.
While I was reading your post and heard the term Ads, the first thing came to mind is all kinds of Ads (not limited to Udemy paid courses, subscriptions) but at the end of post, I learned that the Ads will be only about the Udemy courses/subscriptions only. If this is the case, how Udemy will earn revenue from Ads like Youtube?

By watching and Ad, if a student converts to purchase a course/subscription - its attributed to normal purchase with Instructor's share. This will act as other marketing channel through the courses. Isn't it? Also, the free course creator also promoting his/her paid courses in the free course so it will be tough competition.

But it would be better if you are also planning to include other Ads about external products (of course not about Udemy competitors but other products) through bidding process by companies want to promote their products through Ads (similar to Google/FB/IG) and you can charge those companies to promote their ads and earn revenue that way and possibly share instructor's cut. Just sharing my thoughts on this initiative. Not sure how feasible it is but worth exploring. Advertising is a really big Topic 😊

Appreciating Udemy's efforts to make consumer business strong and wishing a great success ahead!

Btkrausen

Did I miss part of the post that says the ads will only be for Udemy Courses and subscriptions? I've looked over it twice and don't see where he's mentioned that…

Mehul82

@Btkrausen Its mentioned in the "Where Ads will be shown?" Section.

But not sure if I understood it correctly hence clarifying about it.

Btkrausen

Ahhh…I totally looked over that (multiple times, haha). Thanks for the assist @Mehul82

KylePew

What's the data say about why individuals choose to purchase a course on Udemy as opposed to going to a site such as YouTube to learn something? Curious if there is anything about annoying ads users have to skip through, potentially disrupting the learning process/mindset, in order to get to the learning. Feels like another barrier students will have to endure in order to get the information they seek.

At the surface, the potential revenue sounds great, but I see a slippery slope adding clutter to the experience students will have in their learning. But that's why we run tests. Thanks for the transparency. Looking forward to seeing the data that comes back from the trial.

AlvaroChirou

I understand that it is only in free courses

AlvaroChirou

"When the product is free, you are the product."

Starting with this well-known phrase, it is now widely understood that when a user accesses free content on the internet—particularly on major platforms—there is typically an exchange involved. Whether consciously or not, users provide personal data that is then used to deliver targeted advertising.

The concept of tracking users, such as through pixels, is already well-established. For example, when someone visits a course on Udemy, watches part of it but doesn’t make a purchase, they are often later shown paid ads for similar courses or from the same instructor. This is nothing new.

Following this same logic, and understanding how the internet works in this context, it is reasonable to assume that Udemy operates similarly. Now, let’s analyze the implications of this under the platform's new implementation.

Currently, I offer free courses—which I interpret as a form of self-promotion. Just as Udemy gathers data on students to show them paid courses later, I would expect that if a student enrolls in one of my free courses, Udemy might then recommend other paid courses from my catalog to that same student. While this is hypothetical, it would be logical to assume that the system works in this way. In that case, what I’m offering is not truly "free"—it’s an investment.

On other major platforms like YouTube or Spotify, when we upload free content, we receive economic incentives. This makes sense, as it encourages creators to keep publishing content. These platforms benefit from advertising in many forms—direct, indirect, passive, or active—and the system functions symbiotically.

On Udemy, through Rakuten, if you direct traffic to the platform and the student purchases a course, you receive a percentage—around 15%—of that sale. This motivates those who promote Udemy and drive traffic to continue doing so.

This brings me to the central question of this proposal:

Why doesn't Udemy pay a commission on a sale that occurs through the influence of a free course created by the same instructor?

In the Udemy for Business (UFB) model, instructors are compensated even for free courses that are viewed within that catalog. It would make perfect sense to apply a similar model here: to pay instructors the standard referral percentage when a paid course is purchased as a result of interaction with their free content.

Doing so would likely motivate more instructors to create high-quality free courses and share them widely, which in turn would drive more engagement and potential sales for Udemy.

I won’t delve into the predictable debate about which courses get promoted in these placements—after all, if competitor courses are already displayed on our course pages, there’s no reason why this new implementation should be any different.

What would be truly valuable is if Udemy allowed instructors to define a suggested learning path or bundle—especially within their own catalog. This would not only serve as useful information for students but could also inform Udemy’s algorithms for recommending or bundling courses into promotional offers.

In summary, Udemy should pay a percentage of the sales of courses advertised in the free course to the instructor who created, published, and advertised Udemy.

PhilEbiner

This is another idea that has been thrown around for years, and I’m intrigued to see how it goes. A long time ago, free courses played a bigger role/had more presence on the platform. Then they basically ‘hid’ them because perhaps they were competing with the paid courses.

But I always thought that free content/courses/individual lessons could play more of a role in being a lead magnet for students. However, from the way the post is worded, if a student purchases a course from an ad does the instructor of the paid/purchased course make revenue? Is the ‘no revenue sharing’ referred to just for the instructor of the free course content? @RyanJaress

If this does have success, I truly hope they have a revenue sharing model for free content like YouTube and other social platforms. I would need a real incentive to post free courses or other content on Udemy as opposed other places.

very interested to see how this goes

AlvaroChirou

According to the announcement, the instructor, since the course is free, does not receive income, and therefore does not receive income from the sale of the course that was made through the advertising that was shown in the free course.
This is exactly what I am talking about in my comment and I express that participation in the sale of the course that is carried out by the advertising shown in the free course should be given.

Col (Dr) Shabbar Shahid (Veteran)

This sounds like a strategic and potentially beneficial move. If implemented thoughtfully, advertising can indeed generate additional revenue. However, the key consideration is how that revenue is shared. If the gains are equitably distributed among all stakeholders, including instructors who create the content, then it’s a win-win initiative. But if the primary goal is to boost shareholder returns without fairly compensating content creators, it raises valid concerns. Transparency and fairness will be critical to ensuring this move strengthens the entire Udemy ecosystem.

MarkTimberl006

Hmmm…

If instructors could place ads in the marketplace then I would be interested.

But as this is solely for Udemy's bottom line I am not sure what benefit I get other than supplying a free income stream for Udemy from my free courses?

And yes, I understand the 'what is good for Udemy is good for me' argument that is often rolled out when changes benefit Udemy, but I am not sure that is always reflective of reality…

MarkTimberl006

Excellent point Phil, with YouTube rolling out course options on YouTube, why would I put a free course here and earn nothing, when YouTube will at least provide a revenue share?

GeographyTutors

This is exactly what I’ve been advocating for; it’s a step in the right direction and a smart move toward making learning more integrated and impactful.

ThomasMitchell

I’ve stopped making assumptions like that, especially since Udemy already promotes competing courses above the fold in my vertical.

ThomasMitchell

That’s the pilot. They said they were starting with free courses.

ThomasMitchell

There was no mention of tiers in the announcement. I’m taking the announcement at its word.

I understand the comparison, but it’s not really apples to apples. One is entertainment and one is essentially schoolwork.

It’s possible that the feedback from my buddies is not indicative of what the feedback at large will be, and I hope that’s the case. I was just pointing out what people in my circle and industry are telling me.

GreenCourse

Hi,

I think the long term goal is to follow youtube model, where student will have two choices:

pay nothing and have access to all courses, but still have to watch ads
pay a susbscription and have access to all courses without ads

instructors will be paid based on minutes teached.

regards,

AHardin

I think this is potentially a promising idea if Udemy considers more than just ads with a tiered subscription model, where other select features are only available with higher-tier subscriptions, such as AI role play, in-course labs, AI assistant, Q&A, etc.

PuneetGupta453

But currently your course landing page is advertising the competitor's course under "Other Students brought" and "Bundle Buy" section.

GeneWarner137

Putting on my businessman's hat, I'm guessing that ...

Udemy WILL proceed with a plan to display commercial advertising with course content.
Advertising will ultimately be shown in ALL courses.
Information about revenue from such advertising will be considered confidential.
Udemy will make all decisions about if, and to what extent, instructors' might share in such revenue.
Subscribers WILL be offered a choice of ad-free learning at a premium price.
Instructors WILL NOT be given a choice of opting out of the advertising system.

If I was a part of Udemy management, I'm sure I'd now be thinking that the original business model (vid., brokering space on a server platform for wannabe teachers/trainers) was an innovation that it has long since outgrown ... that the money that's being sent out every month as instructor revenue is now just an exercise in bloodletting, and I'd be reluctant to add shares of my new advertising revenue to that.

I was never in it for the money, merely wishing to share some of what I'd learned with the hope that it might help someone else's job prospects and earning potential. If Udemy needs to sell advertising in order to remain viable, I guess that supports my personal agenda.

NoorFakhry

Finally, Udemy is listening to us!
This is something I’ve been advocating for a long time here in the community — and I’m honestly glad to see the new management actually listening to instructors.

I’ve said before (see my earlier comments here and here) that the only way for Udemy to stay competitive — especially with YouTube — is to embrace an ad-supported model. Many people disagreed with me at the time, but I still firmly believe that this is the right path forward, and I'm happy we're finally testing it.

That said, I sincerely hope Udemy doesn't waste too much time testing this on the current free courses, which are usually just 1–2 hours long and — let’s be honest — not the type of high-quality content advertisers would want their brands associated with. Instead, Udemy should give instructors the option to create full, premium-level courses that are free with ads, similar to YouTube’s approach. Let learners decide if they want to watch a course for free with ads or pay to access it ad-free or via subscription.

Imagine a top Python course — this is the kind of content advertisers want to support. And as someone with experience in the educational space, I can confidently say that companies pay a lot to run ads on educational content, especially high-quality, long-form videos.

Let’s not miss the opportunity here. YouTube has already taken the lead, offering fresher, more discoverable content — and that’s where many instructors are moving now. But if Udemy implements this model correctly, it could become a real competitor again and re-establish its dominance in the online education space. Even platforms like Spotify have proven that the ad-supported + subscription model works very well.

Lastly — please Udemy, don’t make this limited to curated content like Udemy Business. Let every instructor opt in to the ad model if they want to. Open it up, make content more discoverable within the platform, and give us the tools to succeed — just like YouTube does.

Thanks for finally moving in this direction. Let's keep building this momentum — together.

Coach.Hector

This can be a GREAT source of income for both Udemy and Instructors if they do it Well and Fair.

EdenMarco445

Interesting strategy! Could work if it's subtle imo since people don't like ads but for free courses it might be more acceptable.
Execution is key though there's a fine line before it starts to annoy learners
in the end the numbers will tell but this could be a great driving factor if done right :)

GenefaMurph976

Thank you all for your comments - please keep them coming. As many of you have commented, this is an area where there is a lot of nuance and it needs thought and attention so that we create an experience that does not lead to a poor learner / user experience. The good thing is that there are also a ton of proven models in play today. We are looking at all of them and taking the data from this test - for now, the test is only for free courses, and we haven't implemented the model YouTube has where ad share comes after the YouTube Partner meets certain criteria (watch hours, subscribers etc) but that is an area along with other models that we will explore. I will answer some of the specific questions that have been raised here also:

- @Coach.Hector - for now, this is free courses only, we will be closely monitoring to look at conversion to revenue - while yes normally free leads to paid, for some, the free course is where they stop. The intent behind us sharing this message here specifically with you, was so that instructors could be part of this journey with us and help inform our thinking and approach. So your point re transparency and open dialogue is taken.

- @Btkrausen @AHardin and @ThomasMitchell as we are exploring options and understanding if / how we go forward, the concept of tiers is a natural area to explore - we have spoken in other forums about our desire to introduce more variation in our personal plan subscription offerings with tiers - value tier, base tier and premium tier (those are not the names, those are the concepts under exploration). The Ad element is another variable in that discussion (should we decide to evolve post test), and as some of you have mentioned, with tiers we want to give optionality (like other providers do) so that people can pick the subscription that works for them - they may make that decision based on affordability, features, desired outcome etc. We are trying to look at all the different customer needs.

- @PhilEbiner the no revenue share only refers to free courses, which is the extent of the pilot today. The paid course world is more complex as is being raised here. As we explore what could be possible, the element of revenue share with instructors will of course, be one of the key factors. We want instructors to be excited to be on Udemy and see the value of being on the platform.

- @MarkTimberl006 if we go down this path there are a few things to consider re ads - the first and foremost principle is the ad has to be relevant to the learner, but your idea on instructors being able to place ads is something that has come up (for example if you wanted to run an ad for SME Heros), other suggestions in verbal conversations with instructors has been ads from relevant 3rd parties e.g. someone who teaches on AWS and an offer for AWS credits coming up.

- @Col (Dr) Shabbar Shahid (Veteran) thanks for the comments - to your point on transparency that is 100% valid and is the intent in many ways of this post. Previously, let's be honest, we might have announced this on earnings and not posted in the community here to get feedback and reactions. However, because we know this impacts you all and we want to bring in those ideas and concerns, we shared this openly. We couldn't share this ahead of time as this would have been considered material non-public information so we have governance rules in place as a public company as I know the community is aware, but i'm glad that we can now get the feedback from instructors to help inform decisions we may make.

- @NoorFakhry thanks for the comments - I will go look at those posts.

To all others who have commented - thank you and please continue to share feedback of all varieties, all is welcome.

Col (Dr) Shabbar Shahid (Veteran)

Thank you. Delighted indeed.

Jewez

While this may help increase Udemy's platform revenue, it raises important questions for instructors, especially around fairness, compensation, and transparency.

Here are some points I believe should be addressed

Ads should only appear at the beginning of a course or the end of lessons, never in the middle of learning. There should also be a daily limit, such as three ads per day, to protect the learning experience and help with student retention.

And if Udemy earns money from ads on course content, instructors should receive a fair share, also. This applies to both free and paid courses. because it's the instructors’ work that drives engagement and revenue sharing. Free courses still require time, knowledge, and effort. If ads are shown, instructors should receive some level of payment, even if it’s a smaller amount. This encourages creators to continue offering free, valuable content.

A tiered system could offer options, for example, a lower-cost version with ads or a premium version without them. This model helps support the platform while still giving instructors their fair share. If the ad program continues, Udemy must clearly explain how revenue is shared, how ads are chosen (especially if they feature competing courses), and how this impacts course rankings or visibility If Udemy’s income increases through ads, instructors should benefit too.

This is a partnership; Udemy needs instructors, and instructors need Udemy. When both sides are treated fairly, everyone wins. This would encourage more high-quality courses, which leads to more sales and long-term platform growth. This program could be a win for everyone, but only if it's built on fairness, shared revenue, and full transparency.

PuneetGupta453

I think it is important to define the term "advertisement" in this context of pilot launch?

Coach.Hector

Thanks!

Veasna, M.

I support the Ads idea for free courses, and I hope Udemy will share revenue with us soon after the trial period.

Parker

Ads? No thanks! This adds ZERO value to students.

Mike Pritula

Wow! I like this idea! Full support.

Shahtajbhutto

I agree with you, They could definitely test this, but it would significantly impact the market and how instructors' course performance and sales are measured.

If a student buys a course during a promotion for $10 to $20 (depending on their region), and Udemy offers two versions with ads and without ads, then Udemy needs to be very careful with pricing the ad-free option. If the ad-free version is priced more than 15-20% higher, there's a good chance students will just go for the cheaper, ad-supported option especially since the content is exactly the same. Most students prioritize cost, and a noticeable price difference could affect conversion rates.

Well, may be they will go for option 2 as you mentioned subscription price at a higher price for no ads.

PanoraM Akademi

I'm telling all instructors: Are your Udemy earnings really dwindling? Every time Udemy uses terms like "advanced development leader," instructor income plummets even further. So how far will instructor earnings go? Or is it just me who's bothered by this?