Following the global economic meltdown that has negatively impacted some tech companies, Alphabet-owned video streaming platform YouTube has revealed plans to upgrade its short-form video service to include shopping features after its ad sales dropped.
Youtube seeks to make its platform a one-stop shopping destination while ensuring that content creators will be able to use its software to track and tag products featured in their videos.
The feature is currently being tested on different channels which will permit viewers to watch a clip and purchase products directly from YouTube through shopping tools generated and hosted by Google.
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The video streaming platform has partnered with Shopify to allow creators and merchants to feature their products on their channels, which will also enable eligible content creators to link their Shopify store to their YouTube channel.
YouTube witnessed a quarterly ad revenue decline of 1.9% year over year. In the third quarter (Q3) of 2022, the company posted revenue of $69.1 billion and earnings per share of $1.06, failing to meet Wall Street’s prediction of $70.61 billion.
The ad revenue slowdown for YouTube shows a pullback in spending by some advertisers, which was first noted by the company in the last quarter.
Some advertisers that slowed their advertising spending on YouTube came from the financial services, insurance, loans, mortgage, and crypto industries.
In a bid to diversify its revenue, the Video streaming platform is testing new commission schemes for influencers who sell products through links in videos.
This is coming after YouTube introduced “new ways for users to monetize YouTube Shorts. The platform has continued to struggle with its strong rival TikTok, over the past two years, which has seen it heavily invest in its short-form video feature.
In June 2022, YouTube Shorts had topped 1.5 billion monthly logged-in users. After tests earlier in the year, YouTube in September began running ads in Shorts, and starting in early 2023, YouTube Shorts is launching a revenue-sharing program for creators who meet certain criteria.
YouTube will also pay out 45% of revenue to Shorts creators allocated based on views, which is lower than the 55% it shares in the core YouTube Partner Program.