Youtube Shoppable Ads: Is it War on Instagram Live Shopping?

YouTube’s video ads now have a new format for brands to use, shoppable ads. It’s a direct response ad format that allows brands to display browseable product images under their ads.

The browseable product images will offer a “storefront” under video ads, with brands able to link out to their own product pages.

As consumers shift their interest to online shopping due to the global pandemic, social platforms like Facebook, Instagram, YouTube, and even Snapchat are all releasing solutions to help businesses improve their eCommerce presence.

YouTube videos and ads are persuading customers to purchase

YouTube’s choice to create a new direct response ad format is a combination of seeing the market (Facebook Shops, Instagram Live Shopping, etc.) and understanding their internal data.

70% of people say they bought a brand as a result of seeing it on a YouTube video.

YouTube’s goal with this new ad format is to inspire people to take action on video ads.

The direct response advertising approach on YouTube

Speaking to its goal, shoppable ads are optimized for direct response advertising.

If you’re unfamiliar with direct response advertising, it’s essentially a form of advertising that makes people take immediate action. With shoppable video ads, it’s to take consumers to a product page.

Direct response advertising is popular due to its trackability (you don’t have to wait for some to come back to take action), its personalization of the offer, and its demand for action.

Image showing a facebioook ad.

Going this route should for YouTube’s new ad format comes as no surprise. Google itself has always put measurability at the core of its products.

Additionally, as eCommerce gains popularity it is becoming increasingly obvious that social platforms with poor direct response activity will struggle with ad demand.

Both Twitter and Pinterest have seen ad demand fall during the pandemic.

So, how well are shoppable ads performing?

Aerie, a sub-brand of American Eagle, has already tested out the new ad format to drive brand growth and sales.

The results?

Aerie saw strong engagement for their brand and achieved a 25% higher return on ad spend than the previous year—with nine times more conversions compared to their traditional media mix.

What kind of content will work best on YouTube video ads?

YouTube’s beta test with Aerie was focused on just displaying product images.

Those worked well but I want to propose a different option for brands to test.

User-generated content (UGC).

Product images are dime a dozen and it’s well-known that great user-generated content can really make your brand stand out. Not to mention it’s viewed better by consumers than professionally generated content.

Facebook shoppable ads.

Consider using user-generated content in place of those boring product images to really drive conversions.

If you need help generating high-quality UGC, Trend can help you generate the content you need to supercharge your YouTube storefront.

How to use the new shoppable format as a brand

All brands need to do is sync your Google Merchant Center feed to your video ads.

Once you do, you can also expand your call-to-action button with the best-sellers and send viewers directly to the product listing on your own website.

YouTube’s Shoppable Ads vs Instagram Live Shopping

As mentioned earlier, YouTube isn’t the only social platform innovating in the wake of COVID-19.

Facebook launched Facebook Shops and Instagram Live Shopping while Snapchat has also expended their dynamic ads.

A picture showing Instagram ads.

So is this a direct response to Facebook Shops and Instagram Live Shopping?

The answer is no.

YouTube’s new ad format is more similar to a counterpart of TV.

This “storefront” feature is more along the lines of shoppable video ads you see on Hulu or other streaming platforms that have ads.

It’s advertising on content rather than a brand creating the actual content.

What else is new on YouTube ads?

In addition to launching this new ad format, YouTube is also launching Video action campaigns.

This feature brings video ads to YouTube home feed, watch pages, and Google video partners, all within one campaign.

YouTube will also add new inventory for those campaigns like the What to Watch Next feed.

video ad in more places.

Also available now are lead forms on Video campaigns.

Jeep has actually tested this feature with their Korea branch and saw a 13x increase in completed leads at an 84% lower cost per lead.

According to Jeep’s Korea Marketing Manager, this was actually the most leads they generated at the most efficient cost among all ad platforms they use.

For optimizing these campaigns here’s what YouTube’s sales VP Adam Stewart has to say.

If the brand thinks of subscription sign-ups or leads as a direct response conversion metric, the campaigns will be much more effective at optimizing those results.

The bottom line

As eCommerce grows, we can expect social platforms to continue to offer more solutions to help brands grow their eCommerce business.

YouTube shoppable ads is a great upgrade for brands that are advertising on YouTube already, or looking to spend dollars there and measure ROI.

If you do decide to use YouTube’s new ad format, we recommend using user-generated content in place of standard product images.

These are well-known to improve conversions among consumers.

Need some help? Trend has a whole curated network of content creators ready to deliver what you need to make your shoppable ads stand out. Book a demo now or get started to start improving ad conversion.