“On TV and Video” is a column exploring opportunities and challenges in advanced TV and video.
Today’s column is written by Curt Larson, chief product officer at Sharethrough.
A looming recession has organizations pulling back some of their advertising dollars, forcing brands and advertisers to reevaluate return on ad spend (ROAS). Tying ad spend to conversions by making ads actionable is one sure way to measure ROAS more effectively.
To that end, many brands are turning to solutions like shoppable TV ads. With over half of adults remembering seeing a shoppable TV ad and CTV media investments growing at nearly triple the rate of overall ad market investments, shoppable TV will progress even more in 2023, as advertisers continue to gain valuable experience.
Meet your consumer
A recent Aluma study revealed that, among adults who remember seeing a shoppable TV ad, 39% engaged with the ad, and of that 39%, 70% bought a product.
When YouTube ran its early tests for video action campaigns on TV screens, it found that 90% of those CTV conversions would not have been reached on desktop or mobile devices. Why?
Consumers build connections with their favorite shows, making them more likely to buy products they see.
When consumers are watching a cooking show, brands can use shoppable TV to advertise kitchen utensils or ingredients that are used during the show. Maybe the consumer wants to buy the stand mixer the chef is using. Providing an easy way to do so can be perceived positively by the viewer, increasing the chances of a purchase. Plus, TV highlights the product being used in its intended way—not sitting on a shelf in a store.
A recipe for shoppable TV success
Lower-cost items and free shipping are key to TV-based conversions. In other words, “impulse buys.”
To date, however, the barrier preventing these types of impulse buys has been fulfilling the one-click promise we all are now used to on the web. Entering basic information like an address into a TV using a remote can be painful. Technology that enables consumers to take immediate action is the key to success.
When NBCUniversal tested the effectiveness of shoppable TV campaigns that viewers could buy from by scanning the on-screen QR code, they found that the conversion rate was 73% higher than the industry average.
And QR codes are just the first step. SVOD platforms may offer up another solution as well. Because they already have subscribers’ credit card information, they can provide that information to fulfillment platforms, provided consumers grant the right permissions.
Further, the user often has the mobile app that corresponds to the CTV app on their phone. Upon activating the “shop this product” action from their remote control, they could get a push notification to their device that connects to a checkout or learn-more experience.
What’s next for shoppable TV
Broadly, we can expect to see evolution in two areas: where and when the ad is presented, and how the user can take action from the ad.
One opportunity is virtual product placements: Streaming services and CTV platforms can offer predefined objects, such as “cereal box” or “bus stop ad,” that brands and advertisers can replace with their own offerings.
User interfaces also present untapped areas of opportunity. For example, pause screen ads provide valuable screen space for ads that appear when viewers are more likely to have their phones in hand. Subtle overlays are another common trend.
Sponsored content could sit alongside organic content. Native ads can be brought into the content discovery experience through sponsored content categories and ads placed inside channel guides, show info, episode listings, search interfaces and other user experiences. For example, we could see branded search options like “top 10 fashion shows sponsored by Zara.”
Done well, ads are valuable to users. CTV has a chance to provide even more value through shoppable ads. If we’re careful about where and when they are presented, and we make the checkout process easier, it’s an exciting road ahead.
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