YouTube Leans Into Shoppable Ads Ahead of NewFronts Panel

The digital video giant is experimenting with browsable product images in ads it announced in a blog post today, a week ahead of its NewFronts presentation to advertisers. It’s part of an effort from the company to attract advertising spend from retailers looking for new ways to “make your actionable video ads more shoppable,” YouTube Ads director and product manager Nicky Rettke wrote in the post.

Advertisers can sync their Google Merchant Center account feed to their video ads and select the products they want to feature in the browsable product images, which will appear below the video and will link directly to product pages.

The new functionality comes with a push from YouTube to attract marketing dollars from retailers. Of users surveyed in February, 70% said they purchased something with a brand as a result of seeing it on YouTube, Rettke said in the post. Retailer Aerie, which used YouTube’s direct response ads (called TrueView for action), saw a “25% higher return on ad spend than the previous year, with nine times more conversions compared to their traditional media mix.”

The new feature marks a further move from YouTube into shoppable ads, which have been a major focus of social media platforms in recent years. Facebook has introduced shoppable ads on its main platform and on Instagram, and the feature has found a place on other services as well. Users can shop in-app on Snapchat, buy groceries without leaving Pinterest and are even seeing shoppable ads on TikTok.

The format is even making its way to television. NBCUniversal also added shoppable ads via scannable QR codes displayed onscreen and has said upcoming streaming service Peacock may include a shoppable ads function. And streamer Hulu has been working on a transactional ad format, which may allow viewers to purchase items directly.

YouTube parent company Google has been experimenting with shoppable ads in other areas across its digital empire, including the introduction of shoppable ads on image results in search, which first rolled out in March 2019.

The experimental new feature accompanies some other updates to YouTube’s ad options, too. The platform announced video action campaigns, a new ad product that lets marketers plan direct response video ads across YouTube’s home feed, watch pages and Google video partners as part of one campaign. Those direct response ads may also run in the What to Watch Next feed, a module for users who have subscribed to a particular channel. 

YouTube is set to make its annual Brandcast presentation to advertisers on June 25 where it will look to secure long-term ad commitments from major advertisers. The spruced up direct response features will be one focus during NewFronts conversations, as YouTube looks to court advertisers with fast-shifting needs.

“We’ve never seen such variability in advertisers’ situations. As a result, it’s not surprising that flexibility is the number one ask we’re hearing from our customers,” Google and YouTube vp of sales Adam Stewart said in an email. “Our pitch is that YouTube can help brands not only expand their reach with an audience they can’t find on traditional TV but also inspire consumers to take action and drive growth for these brands.”

Alphabet CEO Sundar Pichai has in the past touted YouTube’s direct response ads and said the company was working on expanding the feature.

“I think an area where it really works well, for example, is app installs,” Pichai said during a company earnings call in April. “That’s a great example of it. Gaming is another good example of it. And we are working on iterating and making the formats work better so that it applies to more contexts as well.”

Google reported YouTube’s ad revenue for the first time in February, revealing the platform made $15 billion in fiscal year 2019 out of Alphabet’s $161 billion in total revenue.