Analysis & Opinion

Nick Thomas: YouTube, transactions, and ‘Jennifer Aniston’s jumper’

Nick Thomas

Nick Thomas

Last week saw YouTube announce the launch of TrueView, which lets advertisers showcase product details and images – and gives viewers the ability to click to purchase directly.

Sounds like a potentially significant innovation – but is it? IP&TV News asks Ovum analyst Nick Thomas would he thinks…

IP&TV News: The notion of being able to build commerce into ad solutions is hardly a new concept is it?

Nick Thomas: It’s been around a long time. It’s a bit of a ‘Holy Grail’ that you can make these short cuts down the marketing funnel and go straight to commerce. The motif is ‘Jennifer Aniston’s jumper’ – the idea that viewers will see something they want and be able to buy it on the spot. People in TV have been talking about that for the last twenty years. And you have to say that it hasn’t been hugely successful.

Times have changed significantly of late though haven’t they?

In general people are certainly more inclined to buy things on their mobile phones or laptops or tablets than they were, so it’s certainly worth looking at again. But I think, realistically, you have to be fairly cautious about how much of an impact it’s going to make and not get too caught up in the hype of how brilliant it’s going to be. There’s a degree of cynicism, certainly from the ad industry, because they’ve seen all this before and it’s never really come to anything.

Why do you think these transaction models keep coming up short?

The impediments are not so much technical. It’s pretty straightforward to build a billing and payment mechanism. It’s more in the execution and the content and the tone.

I think the main challenge is to get the right offer in front of the right person. Although that sounds very straightforward, it’s still a massive challenge, and we’re seeing more advertising now that’s targeted, that’s based on what we’ve been looking for before. So if you’re searching for something on John Lewis at lunchtime, then the next time you go on certain sites you’ll see ads following you around.

The danger of that approach is it’s a very difficult balance to get right, because as consumers we’re slightly freaked out by it. It raises questions of someone being overfamiliar. To a statistician it’s a brilliant solution, but it’s actually a very difficult to get the tone right.

Is anyone striking the right balance do you think?

One example we’ve seen of going from editorial content to a transaction that seems quite successful – and it’s not in video – is what the Mail Online does with what used to be called advertorial: a story about what somebody was wearing on a catwalk, then beneath it a little feature about where to get that dress.

Why do you think YouTube has waited until now to experiment with this?

We know that they need to better monetise all the video traffic they generate, and they are realising there are multiple ways of doing this. There isn’t going to be one easy hit that’s going to suddenly change the rules and see their revenue accelerate. I’d be surprised if they thought this was going to be the saviour of their business singlehandedly rather than a part of a wider strategy. But we’ve seen what a company like Amazon can do about building a really simple to use, intuitive commerce transactional model: the one click to purchase and so on. That’s a combination of great technology, a great consumer experience and a trusted retail brand.

Could YouTube succeed in this area where others have failed? They have an unusually detailed picture of users’ viewing habits etc.

Absolutely. In theory they have that as an advantage. And they have all the content. It’s still a primary access portal for video content to hundreds of millions of users. These are key cornerstones.

One of the challenges it will have is where this kind of commerce will sit and who’s going to own it. If you’re a YouTube star promoting makeup or a book or clothing, there are vested interests. The brand will want to have a role in that. The vlogger will want a role. And it’s difficult to know where YouTube as a platform fits in. If there is money in this ecommerce model, there are other interested parties who will want their cut of any transaction and that could be a challenge.

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