YouTube is pushing further into ecommerce – here’s why

The new feature, called TrueView for shopping, launched last night (22 May) and adds shopping elements to YouTube’s pre-roll ads. It means advertisers will be able to add product offers, pricing information and product images to their ads, as well as a buy button.

YouTube however will not facilitate the transaction, instead sending users off to the advertiser’s website.

YouTube has been testing the service in the US with brands including furniture retail Wayfair and Sephora, which sells makeup. Wayfair claimed it saw revenues increase by three times compared to the more traditional TrueView ads.

Sephora said the new format drove an 80% uplift in consideration and a 54% increase in ad recall.

Declining ad rates

Google has previously admitted that YouTube was one of the reasons behind an overall decline in its ad prices because advertisers pay less for these ads than for Google search ads. This is because viewers are not typically as close to purchase when they view ads on YouTube as they are when they perform a Google search.

The shopping feature follows the introduction of YouTube cards, which allowed brands to include information as overlays on top of video ads.

They gave YouTube another way to make money from ads, meaning advertisers would pay if someone click on a card even if they didn’t watch the full ad.

TrueView for shopping is expected to work in a similar way, with advertisers charged for a click or a full ad view. YouTube will not charge more if the customer goes on to actually make a purchase.

The hope is that the shopping feature will make the ads more effective, meaning more brands will want to buy them and YouTube can charge more per view.

Richard Armstrong, founding partner at content marketing agency Kameleon, says these in-video cards are making YouTube a “cleaner experience” and making it easier for users to outside the YouTube channel and experience the brand story and shop.

Taking on Amazon and eBay

While Google remains the top search engine globally there are signs that Amazon and eBay are eating into its share of product-related searches. The numbers of people going to Amazon to directly search for a product are increasing.

The move into ecommerce is aimed at helping YouTube become a starting place for product searches. YouTube already has more than one million channels devoted to reviewing products and is keen to monetise them

Andreas Pourous, co-founder of digital marketing agency Greenlight, says: “While Google dominates the online search market, Amazon and eBay have become annoying flies in its ear. Consumers are increasingly going straight to these marketplaces to find the products or services they want to buy and this has raised questions over the search giant’s future in the consumer journey.

“Turning YouTube into a giant storefront is the clearest indication yet that Google isn’t taking this threat lying down. By enabling consumers to buy products from within YouTube videos, Google is marking out a new e-commerce battlefield against retail marketplaces – in the realms of consumer entertainment.”