The popular video service on Thursday announced TrueView video ads, a desktop and mobile feature rolling out over the next few months. It essentially lists several of the products featured in a video ad alongside the ad itself.
Watch a short video ad from online furniture site Wayfair on desktop, for example, and a slim vertical pane pops up after five seconds on the right-hand side, showing items from the ad such as a couch or rug with their prices. On mobile, if users hold their phones vertically, the products are listed below the ad.
Clicking on one of the listed products directs users to the product page on the retailer’s site.
It’s basically another way for YouTube to help advertisers promote their goods, make the process easier for shoppers to figure out how to buy something they like and ultimately boost YouTube’s ad revenues in the process — something the company really needs.
YouTube, which has more than 1 billion monthly active users, reportedly made $4 billion in 2014 — up from $3 billion the year before — but hasn’t eked out much profit: The vast majority of revenues went toward paying for content and technology on its backend.
It’s vital that YouTube become a profitable business in the next few years. Although advertising still accounts for the overwhelming bulk of Google’s overall revenues — about 90% — and ad revenues are still climbing, ad sales growth has slowed over the last several years. Meanwhile, Google’s cost per click (CPC) also continues to plunge, dropping 7% in the last quarter alone.
Finding alternative sources of revenue is critical for Google as it tries to offset slowing ad sales. Ad features such as TrueView obviously aren’t enough on their own to compensate for this slowdown in the short-term, but it’s not the only growing business Google has.
Google Play, for example, has evolved from an upstart marketplace for mobile phone apps to a mammoth media hub, which Citigroup analyst Mark May estimates will grow from $1.3 billion in 2013 to more than $5 billion in 2017.