Google’s competition with TikTok heats up as it expands YouTube Shorts’ offerings for advertisers

Amid declining ad revenue, Google has added several new features to YouTube Shorts aimed at enticing advertisers to reconnect with the platform, but experts fear Shorts’ is failing to adequately differentiate itself from TikTok.

To capitalise on platform growth and regain lost ad revenue largely brought on by TikTok’s surging popularity, Google has introduced a series of new ways for advertisers to build brand awareness via YouTube Shorts.

With daily views reaching 50 billion, YouTube Shorts is a rapidly growing platform and has been positioned by Google as a direct competitor to TikTok’s short-form video format.

To better leverage this audience for advertisers, Google is expanding Shorts into YouTube’s video reach campaigns. Using Google AI, video reach campaigns serve the “best” combination of ads to improve reach and efficiency on YouTube.

In addition to Shorts, Google is adding in-feed video ads to video reach campaigns to create more opportunities for advertisers to connect with their audience across the platform.

Google is also expanding its YouTube Select tool to Shorts. YouTube Select attempts to help advertisers surround the most popular content on YouTube in a brand suitable environment. By adding the tool to Shorts, brands can better reach the platform’s 1.5 billion monthly users.

Advertisers can also break through to the start of a user’s viewing session with the introduction of “First Position on Shorts” piloting across YouTube Select.

With this feature, when a viewer opens YouTube Shorts and starts watching, advertisers can ensure their brand’s ad is the first one they will see, allowing that ad to land a strong first impression.

Will Shorts help YouTube catch TikTok?

Although Shorts is on a positive growth trajectory, these new features come in the wake of Google reporting a second consecutive drop in YouTube advertising revenue, falling by 2.6% year-on-year in Q1 of 2023 compared to the same period last year.

Sam Olive, Head of Video at Wavemaker UK, commented on the competitive landscape between the two platforms: "There is no hiding the fact that this new format from YouTube bears similarities to TikTok, and this approach has perhaps been driven by the news that TikTok recently surpassed Google as the preferred search engine for younger people.

“With the growing number of short form, vertical scrolling video platforms, the big question is: how will they differentiate themselves from each other? They are all very similar encounters - the user experience and content is often virtually identical.

“From a commercial point of view, one of the few ways to separate them will be their potential reach. However, any reach based solutions from Google are likely to attract scrutiny given the questions circling around measurement on its platforms. A concern highlighted by its ongoing impasse with Barb."

As competition increases, will Shorts help Google regain YouTube’s lost ad revenue, or will its lack of differentiation to TikTok be its undoing?