- Top YouTube execs have asserted that shopping is a central focus for the future.
- YouTube has tapped Sephora vet Bridget Dolan and Afterpay’s David Katz to lead its social commerce.
- YouTube is toying with creator monetization via an affiliate program.
In January, when YouTube waved the white flag on its original programming expansion after six years, chief business officer Robert Kyncl wrote in a memo that the company was pivoting to focus on other areas, namely its TikTok-like feature Shorts, and shopping.
The following month, on an earnings call, Google CEO Sundar Pichai described commerce experiences on YouTube as “a whole additional layer of opportunity.”
While still in early days, YouTube has in recent months hired two key executives to realize its
ambitions: managing director Bridget Dolan and VP of product management David Katz.
Dolan, a 20-year Sephora veteran who heads up business strategy, joined YouTube in August, reporting to the video giant’s newly tapped VP of Americas, Tara Walpert Levy (who in turn reports to Kyncl). Katz, who leads engineering for Shopping, arrived from Afterpay in June, reporting to YouTube chief product officer Neal Mohan (who in turn reports to YouTube CEO Susan Wojcicki).
“It’s at a very high level within the YouTube organization,” Dolan said of the YouTube Shopping team. “It’s one of the top initiatives that Susan talks about – Shorts and Shopping, so you better believe we’re going to do some shopping in Shorts while we’re at it.”
“Shopping is a huge opportunity for YouTube and for creators,” Katz said.
He noted, however, that YouTube still has a lot of learning to do around the best forms of monetization: “How much of it is direct, how much of it is indirect, how much of it is through greater creator adhesion, or other ancillary benefits.”
YouTube and its peers are looking to capitalize on the rise of social commerce, a sector that clocked $37 billion in US sales last year — a figure well under the Chinese market, which hit a staggering $350 billion in 2021. Meta’s Facebook and Instagram, Snapchat, and TikTok have rolled out new tools that aim to tap into the deepening relationships between creators and shoppers. They hope that these tools can spur the US and other markets to move toward where the sector is in China in sales volume.
1,000 creators, 5 countries, and 4 verticals
Right now, only about 1,000 creators in five countries (the US, Brazil, Korea, India, and the UK), and across four content verticals (beauty, tech, hobbies, and automotive parts), are part of the YouTube Shopping beta. Roughly 20 brands are involved. Dolan said these brands have access to strategic partner managers, much in the same vein as top YouTube creators do.
That’s a tiny sliver of the tens of millions of YouTube channels in operation today, and also significantly fewer than the 75,000 creators who have access to an existing e-commerce tool called merch shelves, which enables creators to vend merch below their videos.
Merch shelves serve as a predecessor to the more robust YouTube Shopping ecosystem, which involves many items from different brands that want to capitalize on creator recommendations.
To get started with Shopping, eligible creators input products in their Creator Studio dashboards or link to related products, triggering a “View products” pop-up onscreen. From there, viewers can browse products arrayed on the video page, and then check out on retailers’ websites.
“We’re also working with Google Shopping on infrastructure capabilities, like a catalog of products,” Katz said. “We have our own checkout, ‘buy on YouTube,’ that is enabled through some merchants. This is all technology that we’re borrowing from Google Shopping and adapting to the YouTube environment.”
While shoppable video-on-demand is currently the team’s bread and butter, livestreams are a second pillar. That includes a test around Coachella over the weekend, where viewers on stream were able to buy exclusive merch from Billie Eilish and Brockhampton. Looking ahead, Shoppable Shorts are also a key area of interest given how often products go viral on TikTok.
As to content verticals, beauty is an area Dolan sees as fertile for shopping.
“Beauty has gone through some interesting peaks and valleys,” Dolan said of the space. “We got into some beauty drama years around creators kind of chatting across each other, and I think we’re out of those days … I do think we’re back and now I think beauty is again more about shopping.”
YouTube is testing creator monetization with an eye toward an affiliate model
YouTube Shopping is testing ways the platform and creators could make money, and getting brands to pay up will be a key to its long-term strategy.
In the second half of 2022, the company is looking to open the aperture on creators who can tag third-party products in their videos. This could lead to a full-fledged affiliate program.
For the past nine months, the creators in the YouTube Shopping beta have been paid for any sales transacted through their videos, livestreams, or Shorts via the Creator Incentive Program. One day, YouTube envisions brands paying those commissions, but it is currently fronting the costs itself as part of the test.
“The reason why we are willing to do that is because we get a lot of signal from that,” Katz said. “So what we’re learning is where the opportunities might be for YouTube to monetize as well in the future.”
“If we have a ‘buy on YouTube’ transaction, do we potentially take a small cut of that?” Dolan said. “We’re looking at all the elements that we have to work with, but I think it’s pretty similar to what others in this space are doing.”
YouTube is also toying with the launch of a “/Shopping” destination, much in the same way it operates dedicated hubs for curated Fashion, Gaming, and Live content. A Shopping hub housed a
event, but has since gone dark. In building that front for the future, both Dolan and Katz said that personalization is key, making use of YouTube’s algorithm.
“We’re a very powerful and very trusted part of people’s shopping journeys already,” Katz said. “We just haven’t made it easy to get to the finish line.”