YouTube is expanding YouTube Shorts’ monetization by adding shopping features to it.

First reported by the Financial Times and confirmed to TechCrunch, YouTube is piloting a shopping on shorts scheme with eligible American creators, who are able to tag products from their store.

Australian viewers can see the tags and shop via Shorts, as can those from India, Brazil, Canada and the United States.

Shopping will let viewers make purchases as they scroll through the app. Creators are expected to receive 45% of the ad revenue once the program gets up and running properly.

According to TechCrunch, YouTube plans on expanding this feature to more countries and creators in the future.

Diversify, attract, retain

The move is a natural expansion of its eCommerce ambitions. By setting up shoppable ads in 2020 and livestream shopping in 2021, YouTube has been moving towards turning Shorts into a giant shop for some time now.

Of course, the more money it can make via eCommerce, and the more money it can make for creators via eCommerce, the better. By convincing creators that the future to a stable income lies via Shorts, YouTube will also be able to attract businesses keen to be seen in the same space as their customer’s favourite Shorts personalities.

YouTube has also experienced a decline in ad revenue (1.9% year-on-year). One way to compensate for that slump is to increase revenue from shopping features. It’s also a handy way for the company to diversify.

Also announced: a new affiliate marketing scheme

YouTube is also giving affiliate marketing a fair crack of the whip, despite Meta’s lack of success with it. YouTube is currently experimenting with a program that offers creators commission if users purchase recommended products from their Shorts and videos.

Michael Martin, Shopping General Manager, YouTube, via Financial Times

“It is very much an endorsement model, versus a more traditional advertising model or a paid-placement model. Our goal is to focus on the best monetization opportunities for creators in the market.”

The affiliate scheme could help businesses to reach new customers via partnerships with creators. By teaming up, marketers can tap into an engaged, loyal following to boost brand visibility and increase sales in target areas

It must be said that shopping in Shorts is fundamentally different to YouTube’s livestream shopping, even if they both have the same end goal.

For a start, live shopping lets brands promote products in real-time via a livestream. Shopping in Shorts is not done in real-time as users can only shop on pre-prepared and uploaded videos.

Live shopping videos could feature creators playing the crowd to get them to spend more, or showing off the latest and greatest product. On the other hand, shopping in Shorts may feature a pop-up ad for the gadget you just saw your favourite influencer using.

Both allow customers to buy products they saw in a video but go about it in vastly different ways.

Instagram just canned its affiliate program

It’s interesting that YouTube is going down this route when Instagram recently got rid of its affiliate program to focus on Creator Marketplace.

Its affiliate scheme worked in the same way you’d expect most to: creators could attach product tags to an Instagram posts and receive a bit of cash when people purchased a tagged product within Instagram.

Creators never fully took to the program, due to a variety of reasons.

One was the ease of use. It wasn’t easy to sign up for the affiliate scheme. There were a lot of steps and the tagging process wasn’t always seamless.

Additionally, Instagram ended up competing with more established schemes such as Amazon Associates – which let them share links to TikTok and Instagram. There was no reason to ditch that in favour of a more fragmented affiliate scheme.

Those reasons can explain why Creator Marketplace was set up in its place. Creator Marketplace allows brands and creators to match and establish partnerships for specific campaigns.

Charley Button, Talent Manager, Select Management Group, via Digiday

“Since creators want to be connected with brands to work in a variety of ways, not just affiliate, it makes a lot of sense for Instagram to use their own Creator Marketplace for this rather than a separate Instagram Affiliate program.”