Retailers are spending 200 percent more on skippable YouTube ads this year

Retailers looking to flex their creative muscles on YouTube can do so on the platform’s TrueView ad model without time constraints, all while targeting the most interested customers. As a result they’ve been plunging resources into these TrueView ads at twice the rate they were last year.

A study performed by Pixability, a video marketing platform for YouTube, analyzed the YouTube ad spend from the National Retail Federation’s top 100 retailers. Across all retailers, spend on skippable TrueView ads has been climbing since the last quarter of 2014. For the final stretch of 2015, retailers are expected to spend 200 percent more on TrueView ads than during the same time period last year, while spending in the third quarter of 2015 rose 77 percent over the second quarter.

With TrueView, retailers can take their time to show products in action by running product demos, testimonials and how-to videos, according to Google. The ads appear either in-display (on the queue of related videos to the right of the YouTube screen) or in-stream (pre-roll ads that can be skipped after five seconds), and are opt-in, meaning retailers’ resources are going to viewers who have demonstrated interest in the ad.

This quarter, Pixability predicts that retailers will spend $41 million on TrueView ads, with Walmart leading the pack, slated to spend a total of $17 million in 2015 (outdoing Target five-to-one). The sector spending the most on the ads is online, however, with Amazon leading the charge and coming in second behind Walmart with a projected total of $10 million in TrueView spend in 2015.

Source: Pixability
Source: Pixability

YouTube, for its part, is pushing retailers toward its newer shoppable ad models, which rolled out this year (TrueView ads premiered in 2014). The company teamed up with YouTube stars who are popular for their product-focused “unboxing” and shopping haul videos for “Awesome Stuff Week,” a series to demonstrate to brands where they could fit shoppable ads into these highly viewed videos.

“Every day, people are turning to YouTube to help them shop,” said Vikram Tank, product manager at Google. “They’re looking for advice, or inspiration, or product reviews. We want to make the shopping experience better for everyone.”

Still, customers are just warming up to the habit of shopping through social media platforms (a Citi Retail Services survey found that 60 percent of consumers were open to the idea of social commerce, and 25 percent named YouTube as the top driver of purchase inspiration). Programmatic ad tech platform Unruly performed a study of the most shared brand videos of 2015 and found that the retail ads that saw the most engagement weren’t utility driven, they were entertaining.

Google’s “Furever Friends” ad, which featured unlikely animal pals, took the top spot with 6.4 million shares, while Disney’s “Surprise Shoppers” ad took second with 3.9 million shares. The spot showed Mickey Mouse, Donald Duck and other Disney characters surprising shoppers in a mall.

Other retail ads in the top 20 list of most shared brands included a Purina puppy-filled video, and three Adidas spots, all of which featured soccer star Leo Messi.

Retailers should remember this if they want to drive engagement during the holidays. Unruly’s survey of seasonal ads saw only two U.S. ads — Kmart and the NBA — in the top 20, the rest were U.K. advertisements.