Google Plans To Turn YouTube Into Ecommerce Hub: Just The Facts

Ecommerce has skyrocketed as of late, with more consumers embracing digital experiences as a result of the ongoing pandemic. (Ecommerce sales reached $200.7 billion during Q2 of 2020.) Content creators and product reviews on YouTube have become increasingly influential in many consumers’ ecommerce purchase decisions. So recently, YouTube announced it has begun the early testing stages of a new feature that will allow users to purchase the products they see in videos directly through YouTube, potentially transitioning the video platform into an ecommerce hub and Amazon competitor.

What Will The YouTube Ecommerce Hub Look Like?

Essentially turning participating YouTube videos into an inventory of shoppable items, Google’s long-term goal is to convert YouTube into a platform on which consumers can view and purchase products directly from the site. YouTube has already tapped select content creators to begin testing the new ecommerce features, giving each creator complete control over the products featured in their respective videos. According to Bloomberg reporters Mark Bergen and Lucas Shaw, creators will access YouTube’s new software to “tag and track products featured in their clips.” Adding, “the data will then be linked to analytics and shopping tools from parent Google.”

As part of the pending ecommerce hub, YouTube is also reportedly in the beginning stages of a new integration with Shopify, centered around selling products directly through the video platform.

Why Is Google Turning YouTube Into An Ecommerce Hub?

COVID-19’s dramatic effects have led to a massive ecommerce boom — which is likely a major motivator behind Google’s latest investment in building out an ecommerce platform on YouTube. According to Bloomberg Intelligence, there is a possibility for the ecommerce retail market to reach $2.8 trillion by 2025. As consumers spend more time at home and rely on the ease of online shopping for their various needs, Google has the opportunity to step into the ecommerce ring and capitalize on growing sales and YouTube’s massive customer base.

While YouTube already holds a massive advertising presence, evolving the platform into an ecommerce hub opens the door for Google to become a leader in the world of ecommerce – competing against giants like Amazon – while offering its growing group of content creators additional revenue opportunities. “YouTube is one of the least utilized assets [for ecommerce sales],” said Andy Ellwood, president of Basket, an ecommerce startup. “If they [Google] decided they want to invest in it [turning YouTube into an ecommerce platform], it’s a huge opportunity for them.”

Google has made several investments in its ecommerce strategy throughout recent years, launching initiatives like Google Shopping to “bridge the gap between consumers and products.” Similarly, YouTube previously tested a Shopify integration with which content creators were able to post products for sale below their YouTube videos. Launching ecommerce offerings like Google Shopping, YouTube’s Shopify integration, and, now, possibly a YouTube ecommerce hub, provides Google and YouTube with valuable consumer data that can ultimately improve their advertising efforts in the long-run.

How Will The YouTube Ecommerce Offering Benefit Digital Advertisers?

With ecommerce features added, YouTube will be utilized by digital advertisers as both a brand awareness channel and a sales channel, with attribution measurement based largely on sales volume. The ability to clearly track effectiveness of YouTube advertising will have great benefit to digital advertisers and to YouTube, as ROI for YouTube campaigns will be proven. 

For advertisers leveraging YouTube content creators to promote their brands and products, measuring the impact of paid influencers will be easier. Instead of evaluating influencer performance based on ambiguous metrics like followers or views, YouTube content creator performance will be based on actual sales. (Of course advertisers should still select influencers that relay authentic messages that are in line with the brand’s values and not just the influencers that deliver the most sales.)

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About the Author

Carolyn Harding is an Associate Manager of Communications at Digital Media Solutions (DMS), the fastest-growing independent digital performance marketing company. DMS helps its clients accelerate growth by deploying diversified and data-driven customer acquisition solutions that deliver scalable, sustainable and measurable marketing results. DMS performance marketing solutions connect the right consumers with the right offers at the right time to achieve the marketing objectives of our clients. DMS is continually innovating to provide new and emerging media and technology solutions that minimize waste and maximize results across the most competitive industries. Since its inception, DMS has demonstrated incredible year-over-year growth which has earned recognition on the Inc. 5000 list in 2014, 2015, 2016, 2017 and 2018.

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