YouTube is looking to strengthen its position in the market by extending its partnership agreement with Shopify, using the YouTube Shopping affiliate program. This initiative will give content creators access to new brands to tag in their videos, offering them more opportunities to generate revenue and connect with their followers through sponsored content.

In 2023, YouTube reached an impressive milestone: more than 30 billion hours of shopping-related videos were played. This figure reflects the platform's enormous potential to facilitate deeper, easier, and more satisfying connections between content creators and their fans.

YouTube partnered with Shopify in 2022, providing merchants and creators an innovative way to connect with consumers, expand their businesses, and share their stories. With this new expansion of its partnership, the platform is looking to continue leading the way in integrating shopping into the digital environment.

YouTube Shopping: What is it and how does it work? 

This partnership will allow eligible Shopify Plus and Advanced merchants in the U.S. to sign up for the YouTube Shopping affiliate program through the Google & YouTube app on Shopify, a free app that allows Shopify merchants to 

sync products from their online store with Google Merchant Center.

Creators who meet the conditions to be part of the program can proceed to activate it and:

Set a default commission rate: this rate applies to all products shared with Google Merchant Center and all YouTube Shopping affiliate program creators.

Set commission eligibility: this is where you can set your pending period and attribution period.

Add billing profile: A valid billing profile is required to participate in the YouTube Shopping affiliate program. We currently accept credit cards as a valid billing method and are working to add more options in the future. Learn more about billing settings.

Agree to terms and conditions in the onboarding flow.

Shopify merchants can now take advantage of thousands of creators showcasing their products on a large scale in their videos, thus reaching a larger number of consumers. In addition, sellers can easily manage the program and view analytics, content, and products directly from Google Merchant Center.

Content creators can use a new Chrome extension for U.S. creators in the YouTube Shopping affiliate program to save products while browsing a brand's site. 

They will soon have access to thousands of new brands to tag in their YouTube Shopping content, including brands like BK Beauty, Popflex, HexClad, and GoPure.

The expansion of the affiliate program comes at a key time. YouTube has stepped up its e-commerce efforts in recent years to diversify its revenue streams, especially in the face of a slowdown in digital advertising. This move could be paying off, as the company went from $7.665 billion in revenue in the second quarter of 2024 to $8.663 billion.

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YouTube will launch a new shopping feature within its ‘Shorts’ video format. In this way, the social network would be ahead of a very similar service that will also launch TikTok, the app that YouTube sought to counteract when it decided to launch Shorts. 

This means great future sales possibilities for e-commerce and a new access channel to online shopping for consumers.

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The feature is already being tested in some creator accounts in the United States, India, Brazil, Canada, and Australia. Although the company expects to expand product tagging in Shorts to more creators and countries in the short term. 

What is certain is that time is important in this competition that Youtube and TikTok are waging in the field of shopping associated with short videos. 

Video shopping wars? 

A few days ago multiple media outlets pointed towards the fact that TikTok could be thinking of setting up its own supply chain to act as an e-commerce/marketplace and expand the reach of TikTok Shopping, an e-commerce solution that allows sales and purchases to be made from the social network thanks to its partnership with Shopify. 

The shopping feature started in the UK, with the idea of boosting sales for the large community of small online sellers using Shopify in those countries.

Separately, YouTube is also experimenting with an affiliate program in the U.S. for content creators who sell on the platform. In this beta phase, referral links are being included in posts, an option that the company plans to progressively expand to more creators by 2023.

These changes come two months after YouTube announced the new YouTube Partner Program that will be in place in early 2023. 

Creators who meet two requirements - accumulating 1,000 subscribers on Shorts and 10 million views in 90 days - will be able to sign up and receive 45% of ad revenue from their videos on Shorts.

A profit boost for Youtube in times of need? 

These steps taken by the company come as no surprise, as despite Shorts reaching 1.5 billion monthly users, its quarterly ad revenue was down 1.9% year over year. This is due to the post-Covid economic slowdown, which has led many advertisers to cut their ad budgets. 

According to Alphabet's quarterly earnings report, in the third quarter of 2022 YouTube grossed $7.0 billion (about €6.82 billion) from its display ads, while in the same period of 2021 it achieved the sum of $7.2 billion (about €6.946 billion).

By virtue of increasing its advertising revenues, YouTube has been working to make its platform seen as a shopping destination by including product launches, ads with shopping links, and a live shopping feature. 

The latter did not garner the expected enthusiasm among Western users, so it is now focusing more on Eastern markets, including South Korea. 

In order to expand its shopping offerings, the company announced in July this year a strategic alliance with Shopify, so that the platform's users can integrate their stores and promote products through the social network.

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Online video platform giant, YouTube, and renowned e-commerce software, Shopify, announce the launch of YouTube Shopping. It is a platform that offers new live shopping options to allow users to access products directly from YouTube's website, without having to leave the site. 

Starting with this launch, YouTube Shopping users will be able to purchase products from merchants that are present on Shopify while watching a video or live stream. In addition, an interesting new feature that this platform introduces is the ability to checkout via YouTube as well. This new feature is now available worldwide and merchants will need to have a minimum of 1,000 subscribers to be able to use it. 

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Shopify's global growth 

Over the past few years, and especially during the pandemic, Shopify has gained many users worldwide. While live shopping is currently very popular in Asian countries, it is not yet widespread in Europe. According to a survey conducted in the Netherlands, only 13% of consumers participated in live shopping in 2021. However, this trend is expected to continue to grow. 

At the same time, Shopify has recently entered the influencer market. In 2022, the company acquired Dovetale, the well-known influencer marketing startup, launching its own influencer engagement tool. 

The retirement of Tik Tok

Despite its age, YouTube today has more than 2 billion monthly users. Its main competitor today is Tik Tok, which is estimated to be surpassing the classic platform in popularity. Tik Tok launched its own live shopping tool in Europe towards the end of last year. However, in July 2022, it decided to withdraw it in the West after disappointing results. 

Towards multi-channel commerce 

According to Shopify spokespersons, commerce today is characterized by multi-channel commerce. In this respect, YouTube represents one of the most influential channels worldwide. As such, it is hoped that the new integration between the two platforms, Shopify and YouTube, will be able to change the commerce opportunities for independent brands in an increasingly creator-driven economy. 

From this launch, merchants will be able to tag products in a live stream or display a list of products on the back of videos. In addition, they will be able to manage, via the "shopping" tag, which products are shown to users. There is also the possibility to add a "shop" tab to the merchant's YouTube channel. 

As far as the product information is concerned, the products are automatically synchronized with the Shopify catalog, so that the products disappear from YouTube when they are displayed in the Shopify catalog.

YouTube maintains that:

“We’re continuing to expand shopping across Live, Shorts and long-form video to help more creators connect with their viewers and fans in a fun, creative ways and we can’t wait to see how our creators bring shopping to life on YouTube”. 

All in all, this new integration might become a valuable way to further monetize the powerful video platform, for brands and businesses. 

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