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Google (NASDAQ: GOOGL) announced Thursday that it will introduce click-to-buy buttons in video ads on YouTube, the company’s video-sharing website. The news comes just days after Google announced it will begin rolling out click-to-buy buttons in search results on both desktops and mobile devices over the next few weeks.
New TrueView YouTube ads will allow advertisers to feature product information and a click-to-buy button all built into a video advertisement.
In testing the new TrueView ads, one advertiser reported seeing “a 3X revenue increase per impression served when compared to previous campaigns.” Even a fraction of that success would make the Google buy button incredibly lucrative for the advertising giant.
Google recently announced that searches from mobile devices now outnumber searches from desktops in 10 countries, including the United States. As traffic from mobile devices surges, the constant presence of these video advertisements and click-to-buy buttons will make it significantly easier for mobile device users to respond to advertisements.
Consider today’s race for ad dollars between Google, Facebook (NASDAQ: FB), Yahoo (NASDAQ: YHOO), Twitter (NYSE: TWTR) and more. The race is essentially a battle over matching eyeballs with relevant ads – the two factors that lead to success in mobile advertising. Pairing video ads containing the Google buy button with relevant videos could prove to be hugely successful.
But the Google buy button isn’t just about increasing ad performance.
Considering that the Google buy button will give consumers one-click access to purchasing items through Google, it seems to be a direct shot at Amazon.com’s (NASDAQ: AMZN) massive online retail business. Presenting the Google buy button next to search results that might otherwise lead a user to an Amazon site could dramatically change the relationship between Amazon and Google, creating competition where there was once mutual benefit.
The move comes just days after Wal-Mart (NYSE: WMT) fired its own direct shot at Amazon. Wal-Mart announced its own version of Amazon Prime, in which costumers gain access to unlimited shipping from Walmart.com for just $50.
Of course, unlimited shipping is only one part of Amazon Prime. The service also includes photo storage and unlimited streaming from a large library of videos and music, as well as a library of books available through Amazon’s Kindle e-reader service. Nonetheless, Wal-Mart’s unlimited shipping service is seen by many as a potential threat to Amazon’s booming business.
Frankly, I think consumers should be much more concerned about the Google buy button capturing what might otherwise have become Google-search driven Amazon business. Wal-Mart appears to mistake the reasons for which Amazon Prime is successful, assuming it must be the result of free shipping. I believe Prime has fostered a loyalty that stems from the service feeling almost like a membership in a shopping club.
While Wal-Mart’s unlimited shipping offer might do nicely, I doubt it will be the result of Prime customers leaving Amazon.
The Google buy button seems to pose a credible threat to Amazon because of its potential to disrupt some of the traffic that is currently funneled into Amazon.com. Time will tell how – and even if – the change will benefit Google and hurt Amazon.
DISCLOSURE: I personally own shares of Wal-Mart.
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