Retailer Wayfair Gained Three Times More Revenue From YouTube's Shoppable Ads Versus Standard Ones
YouTube is tweaking its commercials to be more like interactive infomercials.
A month after YouTube added interactive cards to its skippable TrueView ads, retail advertisers can now use those card overlays to include product information, images and links to purchase a product on a brand's site. They can also use these ads to remarket to people who may have checked out a product on a brand's site without checking out.
Unlike parent company Google's reported plans to outfit its search ads with buy buttons, people won't be able to buy an advertised product on YouTube. They'll still have to go to an advertiser's site to make a purchase, but YouTube's senior product manager Lane Shackleton said the new ad format makes the path to purchase shorter.
"One of the things we saw was people going off YouTube and searching on Google.com for that product [seen in an ad on YouTube], and then clicking the product listing. In this case we're just reducing the friction," Mr. Shackleton said.
For YouTube, the move is a recognition that people are turning to the Google-owned video service to learn about products they're considering buying. And they're not just watching makeup tutorials that YouTube stars like Michelle Phan are posting. YouTube claims there are more than 1 million channels on the video service focused on product reviews and that views of product review videos have increased by 50% year-over-year.
The new TrueView for Shopping ads are also a move to bring more direct-response dollars to a video service typically viewed by marketers as a way to raise their brands' profiles but not necessarily to push product. Last year eMarketer estimated that 59% of the $50 billion U.S. brands funneled into digital advertising were used for direct-response campaigns that are designed to get someone to do more than just observe an ad, such as clicking through to an advertiser's site and buying something. A Google study from late 2013, "Digital Drives Auto Shopping," found that more than half of auto shoppers watch 30 minutes or more of videos during their shopping journey and one in four watches an hour or more.
"Having the opportunity to lay additional information on top of our pre-rolls is huge," said Ben Young, media manager of TV and online video for home goods retailer Wayfair.
To gauge how huge, Wayfair tested the shoppable TrueView ad against a standard TrueView ad. Both campaigns targeted the same audience, but the shoppable one delivered three times more revenue than the standard spot. "It feels like a huge win," Mr. Young said.
In addition to YouTube's standard ad-targeting options like demographics and interests, advertisers will be able to aim their TrueView for Shopping ads at people who had previously checked out a product on a brand's site, Mr. Shackleton said. As with any TrueView card-carrying ad, advertisers will be charged if people click on any of the product elements or watch the full ad (or at least 30 seconds of it).
People will still be able to skip an ad after it has played for five seconds, which is also when a button will appear in the top-right of the corner of the video player that will display the card overlays when clicked.
To use TrueView for Shopping ads, brands need to have a Google Merchant Center account, which has been used by merchants to upload product information and inventory data to Google's pay-to-play Shopping service. This is how Google is able to collect and catalog brands' product listings to populate the TrueView cards. A YouTube spokeswoman said advertisers who sign up for Merchant Center only to run TrueView for Shopping ads will not be automatically opted in to Google Shopping, which requires companies to pay to have their products listed on the shopping-specific search engine.
