YouTube is finally delivering on the promise of shoppable CTV ads.
After announcing a new slate of shoppable formats during last year’s Brandcast presentation, its annual upfronts-style showcase for advertisers, YouTube spent the past seven months iterating and then quietly rolling them out to buyers via Google’s Merchant Center (GMC) platform.
Starting Thursday, those formats will officially roll out to all of Google’s Performance Max and Demand Gen campaigns, YouTube confirmed to AdExchanger.
On top of that, shopping ads – which is Google’s official terminology, rather than “shoppable” – will also be available via DV360, said Romana Pawar, senior director of product management for YouTube Ads.
Pawar stressed that these types of shopping ad campaigns will, for now, primarily run on YouTube, more specifically on YouTube’s smart TV app.
“Right now,” she said, “this is a living room-only product.”
What the ads look like
The shopping CTV ads pull images and product data from an advertiser’s GMC product feed, and then turn them into a clickable carousel with QR codes that link to each individual item.
YouTube started with GMC advertisers first because they already have robust product catalogs that can be easily converted from desktop and mobile into carousels for CTV, said Pawar.
Similarly, although YouTube’s original Brandcast mockups showed examples of video creative, the only requirements Google has for these ads so far is that the product images be 500 x 500 pixels or larger, and that advertisers opt in to targeting audiences on TV screens.
“Our mantra is, give us one asset and we’ll take care of the rest,” said Pawar.
That doesn’t mean Google isn’t thinking about developing tools that advertisers can use to create video ads, which is something plenty of other companies have explored. Google has long offered a slideshow-based video builder and recently added the pro versions of its AI image generation model, Nano Banana, to the Asset Studio in Google Ads.
How the ads work
Even before YouTube expanded access to its shoppable CTV ads, performance marketing agencies had already noticed an increase in available TV impressions through both PMax and Demand Gen.
Mike Ryan, head of ecommerce insights for Smarter Ecommerce, told AdExchanger that while reviewing aggregated data across almost 1,000 client accounts, he noticed the volume of TV impressions starting to rise steeply in late Q2, and then again in November and December.
“This scale wasn’t possible on TV within these campaign types last year or the year before,” Ryan said.
And although TV still represents a relatively small share of overall impressions – Ryan’s data suggests that, for Demand Gen, it’s gone from less than 0.5% to somewhere around 1.5% – that’s still “millions and millions” of impressions for most advertisers, he said.
Lee Baler, strategy lead and VP of sales at Strike Social, noticed a similar uptick in CTV placements on Demand Gen and PMax campaigns, which started around the same time. During a campaign to generate foot traffic for one of its clients, Strike Social saw a 30% to 40% reduction in cost per acquisition, which Baler attributed to YouTube-based CTV offers.
However, the fact that these rollouts went under the radar for most advertisers is pretty par for the course, according to Baler. “Google makes a change in the platform and it’s an Easter Egg hunt,” he said. “Most people won’t know for months.”
What’s next?
But even if most advertisers haven’t clocked the change yet, Google has noticed an improvement in both the volume of TV impressions and in sales outcomes.
According to Pawar, including QR codes in ads has increased conversions by “more than 100%,” and extending existing ad campaigns to CTV has helped advertisers reach a large pool of net new customers who only watch YouTube on TV screens.
Given those results, it shouldn’t come as a shock that Google is investing more heavily in YouTube’s CTV capabilities.
2024 marked the year when YouTube viewing in the US flipped and TV surpassed both mobile and desktop as the primary screen for YouTube consumption. Meanwhile, YouTube has dominated Nielsen’s streaming TV ratings for nearly three years running, as YouTube CEO Neal Mohan pointed out in a recent blog post.
And in July, Google SVP and Chief Business Officer Philipp Schindler told investors during Alphabet’s Q2 earnings call that YouTube had driven more than one billion conversions in the 12 months leading up to that point, and cited the already burgeoning success of its shopping CTV ads up to that point.
So expect YouTube to keep on leaning heavily into CTV shopping moving forward, Pawar told AdExchanger – especially in ways that “continue that shopping journey” from the TV screen to other devices.
“You’ll see a lot more from us on the second-screen side,” she said.
