Brand Shoppability Comes to YouTube Shorts
YouTube Shorts is diving into the trend of shoppability. The TikTok clone announced that it will integrate shoppable content and affiliate revenue. This comes as it tries to attract creators and counteract revenue declines.
Before getting into all that, what’s the shoppability trend all about? Everything is becoming shoppable. Not only are social feeds and online video channels places to market products, but they’re increasingly actionable with buy buttons.
Back to YouTube, it’s long been a place for organic product promotion for businesses through things like how-to videos. That plays out through brands’ own videos as well as sponsorship and affiliate revenue for third-party YouTube stars and product reviewers. It’s become a highly commercialized environment.
Now, YouTube wants to bring that playbook to Shorts, which has 1.5 billion users. This move is motivated by growing traction for the short-form video format that TikTok has popularized. And as TikTok — early in its monetization lifecycle — continues to devise its revenue model, YouTube wants to beat it to the punch.
With that backdrop, what are the details of YouTube’s latest monetization update for Shorts? In short (excuse the bad pun), shopping features will populate its feed-based UX. Users can buy products as they scroll through user-generated shorts. And it’s all tied together through a tag-based taxonomy.
This plays out as creators tag products that appear in their videos. Again, that can be business-created shorts or third-party creators that want to gain affiliate revenue. And that brings us to the second update: a new affiliate revenue program that rewards (and financially motivates) creators.
This works much like other affiliate marketing programs in that creators earn commissions on completed purchases that originate from their videos. And with the entire product discovery-to-transaction flow happening under one roof (a key tenet of shoppability), attribution tracking is fairly straightforward.
As for the revenue share, YouTube recently announced that eligible Shorts creators will receive a 45 percent cut starting January 1. But they have to first apply to YouTube’s Partner Program and meet the new Shorts-specific requirement of 1,000 subscribers and 10 million Shorts views over 90 days.
Meanwhile, the new shopping features will roll out to U.S.-eligible creators in the coming months, including the ability to start tagging products. On the user end, they’ll start seeing tags and transactional functionality in the U.S., India, Brazil, Canada, and Australia, with more regions coming later.
Back to YouTube’s motivating factors for this move, they include offsetting revenue declines and attracting content creators, as noted. Taking those one at a time, YouTube was among the ad-supported tech giants with dismal Q3 results, specifically seeing its first-ever revenue decline (1.9 percent).
So the pressure is on YouTube to bring revenue back to its former glory. And one way to do that is to lean into trends in ad-supported media and to ride tailwinds seen by players like TikTok. Of course, offsetting those tailwinds are headwinds from the macroeconomic environment and slashed ad budgets.
On to the second driver, the heat has been turned up on user-generated content over the past few years, giving rise to the creator economy. And as that happens, media channels that build businesses around that content (via revenue share with creators) are competing heavily to attract top talent.
YouTube is already highly competitive in that sense, given that it’s a go-to distribution channel for video stars and product reviewers. However, growth has matured, and YouTube sees new potential with the emerging crop of TikTok-style short-form creators. That will be the next competitive battleground.