This is part of a series of articles exploring some of the current trends impacting streaming media companies. In this article, we discuss the rise of Shoppable Ads.
In the 2024 digital marketing landscape, streaming platforms have risen to the top of the priority list for brands looking to engage and activate their target audiences. Platforms such as Peacock, Hulu, and Disney+ have gained widespread popularity, opening new and exciting opportunities for advertisers. At the forefront of this digital revolution is the emergence of shoppable ads on streaming platforms – a transformative force seamlessly integrating product discovery and purchase into the viewer’s streaming experience.
Shoppable ads, available in various formats, are strategically designed to enhance the viewer’s experience without disrupting content engagement. Ranging from in-video ads to interactive overlays and dedicated shoppable landing pages, these ads feature eye-catching visuals, clear product descriptions, and compelling calls to action. The goal is to encourage viewers to explore new products and make purchases seamlessly, creating a dynamic and interactive shopping experience within the streaming environment.
The mechanics of shoppable ads allow viewers to interact with products directly within the streaming environment. In-video ads, strategically placed as pre-roll or mid-roll, seamlessly blend with content, providing a non-intrusive way for viewers to discover products. Interactive overlays take it a step further, enabling viewers to engage with product information and make purchases without exiting the streaming session. Shoppable landing pages provide a detailed product showcase, directly linked from the ads.
Shoppable ads deliver a variety of benefits for both brands and viewers. Brands enjoy increased brand awareness, enhanced product discovery, and a streamlined purchasing process. Advertisers can measure results, including valuable data on ad performance, empowering them to fine-tune campaigns for maximum effectiveness. Viewers, in turn, experience a convenient and frictionless shopping experience, with quick access to product information and an easy, laid-back purchasing process. Certain brands and products are tailor-made for this format — I’m looking at you, Nike! — with massive opportunities to grow the format in the next few years.
To measure the effectiveness of shoppable ads, advertisers and their media partners go beyond traditional metrics like click-through rates. Key metrics now include the product discovery rate, purchase conversion rate, average order value, and brand lift. These metrics provide invaluable insights, enabling advertisers to optimize campaigns for a higher return on investment, making data the driving force behind the success of shoppable ads.
“Interactive video ads with a remote clickable overlay garner nearly 20 times more interactions and are more effective at getting shoppers to landing pages than ads with QR codes”Danielle Carney, Amazon’s Head of NFL Ads
A recent study by LG Ad Solutions revealed that a significant percentage of connected TV viewers want a quick option to buy advertised products. The study indicated that 81% of CTV users are influenced by TV ads in their shopping decisions, with 63% discovering new brands and products through TV ads. Furthermore, 47% of consumers have made a purchase after seeing a TV ad in the past three months, with mobile phones being the preferred device for completing purchases.
Over one-quarter of smart TV viewers actively shop online or via mobile while watching TV, and 28% look for products after seeing them appear on the small screen, according to a survey conducted by Samsung Ads and Kerv Interactive.
The ability to interact with shoppable TV ads is fueling engagement, with Amazon revealing that “interactive video ads with a remote clickable overlay garner nearly 20 times more interactions and are more effective at getting shoppers to landing pages than ads with QR codes”, according to Danielle Carney, the company’s head of NFL ads. Walmart also reported that clickthrough rates for campaigns using Roku’s shoppable ad format were at least three times higher than for average video campaigns run through its DSP.
CTV’s Integration with Retail Media Networks
The flourishing success of retail media networks (RMNs) such as Amazon Ads and Walmart Connect is attributed to a valuable asset – first-party data. Retailers collect detailed information about their customers, including purchase behavior and demographics, enhancing the relevance of messages for both their brand and advertisers. With the decline of third-party cookies, the demand for retail media and its underlying first-party data has surged.
Retail media networks, synced with CTV, enable businesses to run video ads on CTV platforms using the first-party shopper data provided by the RMN. Notable partnerships include Walmart Connect partnering with Roku, Amazon Ads allowing CTV ads on Amazon Prime Video and Freevee, Target Roundel collaborating with The Trade Desk for programmatic buys of CTV inventory, and Best Buy Media Network partnering with Samsung to offer access to CTV inventory on Samsung Smart TVs.
Streaming companies need to ensure their advertising platform can connect and support front end AI-driven RFP / planning workflows, multi-currency, advanced ad formats, RMN data, connected data workflows, AI-based optimization tools, and deliver deeper business insights to advertisers. All of which informs our vision for our AOS platform.
In a recent Beet TV interview with Lindsay Pullins, Director of Ad Revenue Business Strategy, Partnerships at Roku, the growing significance of retail media streaming and commerce was emphasized. Pullins highlighted Roku’s collaboration with Walmart Connect, allowing consumers to interact with Walmart ads on screen and make purchases directly through their television screens. This collaboration underscores the potential of shoppable ads to drive customer engagement and conversion rates.
The Net-Net is a Win-Win
Shoppable ads are poised to play an increasingly vital role in the future of e-commerce. As smart TVs and streaming platforms continue to proliferate, the integration of shoppable ads into the viewing experience will become commonplace – in digital and linear formats. Advertisers embracing this innovative format will be well-positioned to reach new audiences, drive sales, and forge stronger connections with their customers.
Evan Moore, NBCU’s senior vice president of commerce partnerships, predicts that buying from a TV screen will be a ubiquitous experience within three to five years. “Friction is the enemy of commerce, and there are so many times that a consumer is inspired by something they see on TV, but it’s just too hard to find that product. Being able to unlock that transaction right at that moment of inspiration will create new incremental demand for brands and also delight our audiences.”
Here at Operative, we agree. And we believe that streaming platforms need to prepare for this rapid evolution. To really thrive in this new space — meeting the continually increasing demands of advertisers — streaming companies need to ensure their advertising platform can connect and support front end AI-driven RFP / planning workflows, multiple currencies, advanced ad formats, RMN data, connected data workflows, AI-based optimization tools, and must be able to deliver real-time campaign insights to advertisers. All of which informs our vision for our AOS platform.
Shoppable ads have become a game-changer in the 2024 digital marketing landscape, providing brands with an innovative way to connect with consumers and drive sales. As technology advances and consumer behaviors evolve, the integration of shoppable ads into streaming platforms is set to become a staple in the future of e-commerce. Advertisers who embrace this innovative format and leverage data insights will not only reach new audiences but also build stronger connections with their customers. Shoppable ads are not just a trend; they are a powerful tool shaping the future of digital marketing and reshaping the way consumers engage with brands.