Google is planning to add a buy button to video ads on YouTube, allowing advertisers to display product details and buy links alongside their commercials.
Google (GOOGL) explained on its AdWords blog that the buy button will help “connect the dots between the moment a person watches a video and the moment they decide to make a purchase.” Google will also add buy features to its search results, according to The Wall Street Journal.
“Google is under a lot of competitive threats," says Yahoo Finance’s Aaron Task. "Now Facebook (FB) actually serves up more video than YouTube...For a long time Google owned this market and they didn't really do enough, I would argue, to monetize YouTube and extend that leadership…they're still very relevant, but it's not their game anymore.”
This is a smart way for Google to increase monetization of YouTube, notes Yahoo Finance Senior Columnist Michael Santoli.
“Google search largely is used by people looking to buy something.
They're looking for the nearest restaurant or vendor, so the ads that are part of the content might even be exactly what people want," he says. "Google did a wonderful job of buying [YouTube], but they have not really exploited it in terms of ad revenue."
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According to Google, with the new YouTube buy button, retailer Wayfair saw its revenue increase threefold per impression as compared to previous YouTube campaigns. Yahoo Columnist Rick Newman wonders if the buy button will work as well for other retailers.
"This is obviously a huge growth market," he says. "But…will people actually click on the buy button? The fact that Google has not done a lot to monetize YouTube until now means that YouTube has been a really good user experience...But how many [people] just open another browser window and do something else until the ad is over? I guess this will be one way we find out."
