POV: YouTube Shorts Introducing New Shopping Features

Background:

YouTube is adding new shopping features to Shorts, its short-form video offering, including testing affiliate marketing. The intention is to create more diversified revenue streams by boosting ecommerce capabilities.

Details and Implications:

In-app shopping is being introduced to YouTube Shorts, following in the footsteps of competitors TikTok and Instagram that have added commerce to their offerings. The new shopping feature will mean users will be able to buy products directly as they scroll through their video feeds. Users in the US, India, Brazil, Canada and Australia can shop via Shorts by interacting with product tags that eligible creators include in their posts. The company plans to expand this feature to additional creators and countries in the future.

Additionally, YouTube is also planning to implement an affiliate marketing programme that will pay a commission to creators that sell products via recommendations in their Shorts, with the platform, merchant and creator all taking an undisclosed cut of the sale. The feature is in very early testing with a select number of US creators and is expected to roll out to a wider pool of creators in 2023.

Talking about the new features, YouTube Shopping’s general manager Michael Martin said: “It is very much an endorsement model, versus a more traditional advertising or paid-placements model”, explaining that this form of shopping through products recommended by creators was proving popular among YouTube’s younger, Gen Z users, who prefer “queryless video-based interactions” - meaning they don’t want to actively search for products.

YouTube also announced last week that early next year it will start paying creators 45% of revenues from displaying ads between videos on Shorts. To be able to apply to the company’s Partner Program, creators will need to meet a new Shorts-specific threshold of 1,000 subscribers and 10 million Shorts views over 90 days.

The introduction of these new features is the latest move from YouTube on its journey to become an ecommerce destination, having already released shoppable ads and livestream shopping trials. All social platforms are looking to commerce as a new revenue source as shopping habits evolve.

Last week, TikTok quietly began testing its in-app shopping feature, TikTok Shop, in the US, which was previously only available in the UK and parts of Southeast Asia. On Instagram, brands can make their profiles shoppable through product catalogues and creators can share products in livestreams and through the shopping tab, where users can scroll through recommended products and make purchases.

Summary:

All social media platforms are looking for new revenue sources for both themselves and creators – in the face of fierce rivalry and in order to hold onto the best creators. YouTube now boasts more than 1.5bn monthly users, so the new shopping features and affiliate program for Shorts could make it more attractive to content creators in this fight.

Further Reading:

FT | City A.M. | TechCrunch | The Verge |