Market leader in video-sharing YouTube announced a new feature they are trying out on their apps and the website: product recommendations. They claim that the algorithm will give users informational links and other suggestions about products shown in videos.
YouTube’s algorithm is one of the most advanced in the industry. It expertly analyzes what its users watch and recommends videos based on their habits and interests. There are many ways for content creators to get ahead of YouTube’s algorithm (many are able to get YouTube subscribers online), but a fair amount of the puzzle is kept secret.
Automatic Product Detection
This new feature, probably utilizing some of the programming for Google Lens, takes YouTube to another level entirely. It’s a well-known fact that many people go to YouTube to research products prior to making a purchase. Recommending products is a brilliant move, making the app more useful and giving more options to its users.
The recommendations YouTube intends to give its users will be using a second algorithm, separate from its main one. At the moment, it is still experimental and hasn’t gone through all of its testing stages. If YouTube is successful in popularizing this feature, the platform will be elevated to a level including shopping. Other social media networks (Facebook, Instagram) already have integrated shopping user experiences within their apps and websites. It’s about time YouTube joined them.
Apparently, automatic product detection has been in testing for over 6 months but has only been tested by a select few. Representatives from YouTube have not yet confirmed a timeline of the expected launch dates for regions other than the US, so we are still a long way from seeing it as a normal feature on the platform. This may give content creators and business owners time to prepare for what’s coming because this feature may have a great impact on business as usual.
As previously mentioned, YouTube users already use the app to search for reviews of products they are interested in. According to Google, there are over 50,000 years worth of product review videos on YouTube as of 2017. Adding recommendations to these videos only makes them more relevant from a consumer’s perspective.
Product recommendations of this type will surely streamline consumers’ selection process and facilitate impulse purchases. It’s a safe bet that there will be an increase in sales through websites that are favored by YouTube (and Google).
Although these features may come in handy, many users might feel a breach of their privacy because more data is collected from them by YouTube’s algorithm. However, it shouldn’t be too big of an issue.
What This Means For Content Creators
Content creators that rely heavily on affiliate links can expect to lose a significant share of their income. Instead of clicking on affiliate links that content creators work so hard to market, users will probably use the in-app links that YouTube provides. In other words, YouTube will be claiming a larger portion of the affiliate marketing revenue that it had not utilized for so long. This business model works remarkably well for Instagram, and it is actually surprising that YouTube has only now found a way to apply it.
Some business and marketing specialists claim that this will be the end of affiliate marketing programs on YouTube in general. Others think this will signify a complete overhaul in traditional advertising methods.
Content creators have already expressed their concerns on how their usual mode of business should be conducted. Some took to Reddit and asked what would happen if a user followed a YouTube link instead of the link a YouTuber took the time to add to the description box? At this point, no one knows.
What This Means For Businesses
If YouTube’s product recommendations become popularized and stay on the platform, businesses can no longer expect to generate revenue through affiliate marketing programs. Content creators may not be able to compete with YouTube’s algorithm, so businesses should foresee the upcoming trend.
Using influencer marketing instead will be a better option than affiliate marketing and offering sponsorships to substantial social media accounts. Both are significantly more costly for a business, but they have the potential to yield better results in generating sales and driving revenue.
However, there is still a way that content creators and businesses can agree on something with mutual benefit: commercializing content.
Businesses can order content to be created specifically with the aim of getting recommended by YouTube. In other words, they can try to beat the algorithm by working with it. They may create specific programs to replace their existing affiliate marketing programs.
Small businesses that do not have the budget for affiliate marketing can easily create their own commercialized videos with the products they offer. It may prove to be a cost-effective way for them to divert traffic their way if they are able to engage audiences sufficiently using their content as a marketing strategy.
Advice For Content Creators
Affiliate marketers should find new ways to keep up with the innovative technology available. Just as affiliate marketing sprung up (practically overnight), it may soon vanish completely.
Marketing analysts have warned for years that social media marketing is a fluctuating business that requires participants to be constantly up to date with the latest trends, and YouTube’s automatic product detection may just prove them right.
Content creators on YouTube may need to find other means of generating ad-based income if they want to keep their status (and income) relatively unchanged.
Other New Features
YouTube is testing other features as well, namely, the ability to watch YouTube videos on Twitter. Up until now, links to YouTube that are shared through Twitter direct users to YouTube’s app or website. However, with this new feature they are testing, Twitter users won’t need to leave their Twitter feed to watch YouTube videos they find on the platform. It is only being tested on iOS from a group of random beta testers from 4 countries around the globe.