Mike Shaw, Director, International Ad Sales, Roku, takes a look at how TV is still a powerful place to advertise and, with the advent of shoppable ads, how it can also be a place for retail media to excel
Despite the changing ways we consume media, the TV is still arguably the biggest brand builder – especially in the run-up to Christmas. It’s an opportunity for retailers and brands to launch their festive campaigns, with some, such as the annual John Lewis ad, even becoming one of the major milestones of the holiday shopping season.
Yet TV has historically not been well suited for performance-based advertising where the focus is on driving short term sales in the way that online marketing typically delivers, something that many retailers will be keenly aware of. However, as retail media networks and advertising solutions come to market, TV’s role is also revolutionising how commerce businesses can shorten the sales funnel and deliver growth – the shoppable TV ad.
Removing friction in ecommerce
The concept of shopping via ads will be familiar to many consumers, most notably via social media. With just one click, they are redirected to the product page to make their desired purchase, or even straight to the checkout page in certain cases. Connected TV (CTV) and streaming services enable retailers and their brand partners to expand how they reach consumers in a whole new way, and is set to drastically reduce the friction between seeing an ad and making a purchase.
As streaming services continue to evolve and the advertising solutions they offer do too, retailers have more and more opportunities to not just advertise on these services – such as Disney+’s ad tier offerings, but to reach relevant audiences with shoppable ads more effectively. For example, a technology retailer could use a CTV-based shoppable ad to showcase a range of products, and provide information on the local store consumers can use for a click-and-collect purchase. It could even be as simple as buying a pizza for delivery, and it can help to reduce the sales funnel down to just one click.
Making the TV a way to shop
Streaming has firmly become a staple in consumers’ homes, with over 20 million UK households having access to at least one paid service. However, that doesn’t mean consumers are signing up for the premium, ad-free tiers. According to Kantar, 60% of new subscriptions to Netflix in the last quarter were for its cheaper, partially ad-funded tier, presenting a huge opportunity for retailers to connect with new and engaged audiences.
Furthermore, the ability to personalise and engage with those audiences, especially niche groups, is typically higher than on traditional TV channels – notably on special interest Free Ad-Support TV (FAST) channels. It can be a valuable way to identify the type of viewer faster and with less investment. Through the TV, it is possible to reach consumers when they are already engaged in the screen they’re watching, and it makes the remote in everyone’s hand a shoppable unit, with unique technology integrations to expedite the buyer’s journey. It is this level of convenience that promises so much for the future of shopping, offering the chance to reduce the sales funnel down to just one click.
How retailers can take advantage of shoppable ads
Our research at Roku has revealed key criteria for creating an effective shoppable ad. For example, it is important to get the right advert in front of the right audience. Data and ad targeting is crucial here, and machine learning helps to optimise the process by examining prior consumer engagement. It also creates opportunities to optimise campaigns live, and in the future. By having actionable data on how an ad is driving sales, retailers can focus on the most relevant audience or products that are delivering conversion. They can also take those learnings to ensure future campaigns perform better in a way that TV historically simply could not offer. It’s the perfect balance between data and insights, and powerful brand awareness.
From internal research and working with retail partners, Roku has identified three key factors that can help a shoppable ad campaign perform well on CTV.
- Ensure the products advertised are within a price range that isn’t too high to deter consumers from buying at that moment. In the USA for example, this is typically under $100. However, it should not be too low, otherwise customers may not see the value in making a small purchase at that time.
- The message must be seamless, with the video creative clearly explaining to the viewer what they can purchase now. Doing so removes any doubt from the buying process and can remove another point of friction.
- Perhaps most importantly, the user experience must be seamless. One of the quickest ways to make an ad shoppable is by adding a QR code consumers can use on their phones to take them to the product page, or even straight to checkout. Previously a niche concept, they are now widespread. However, the fact that they require users to switch to another device adds a layer of friction retailers will be keen to avoid. Instead, we have found that, by enabling consumers to simply click “ok” on their remote to interact with a shoppable ad, increases the likelihood of engagement by as much as 10 times that of a QR code!
The future of shoppable TV
Although it’s in its infancy, the retail media sector is growing at a rapid rate. According to GroupM, the world’s largest media investment company, the sector grew by 9.8% globally in 2023 and is expected to increase by another 8.3% this year. For retailers who are facing the dual challenges of rising costs and less purchasing power from consumers, retail media could be the revenue stream that might ease their financial woes – and it’s no surprise retail media has been heralded as the third wave of digital advertising.
Yet it’s the power of connected TV and streaming services that are the real enablers of the shift we’re seeing. They already create opportunities to build global brands, but with shoppable ads they can help retailers and their partners drastically reduce the friction in the sales funnel by reaching engaged and interested audiences on the biggest screen in the home.
Author
Mike Shaw, Director, International Ad Sales, Roku
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GUEST COMMENT Why TV is the best home for retail ads this Christmas
Paul Skeldon
Mike Shaw, Director, International Ad Sales, Roku, takes a look at how TV is still a powerful place to advertise and, with the advent of shoppable ads, how it can also be a place for retail media to excel
Despite the changing ways we consume media, the TV is still arguably the biggest brand builder – especially in the run-up to Christmas. It’s an opportunity for retailers and brands to launch their festive campaigns, with some, such as the annual John Lewis ad, even becoming one of the major milestones of the holiday shopping season.
Yet TV has historically not been well suited for performance-based advertising where the focus is on driving short term sales in the way that online marketing typically delivers, something that many retailers will be keenly aware of. However, as retail media networks and advertising solutions come to market, TV’s role is also revolutionising how commerce businesses can shorten the sales funnel and deliver growth – the shoppable TV ad.
Removing friction in ecommerce
The concept of shopping via ads will be familiar to many consumers, most notably via social media. With just one click, they are redirected to the product page to make their desired purchase, or even straight to the checkout page in certain cases. Connected TV (CTV) and streaming services enable retailers and their brand partners to expand how they reach consumers in a whole new way, and is set to drastically reduce the friction between seeing an ad and making a purchase.
As streaming services continue to evolve and the advertising solutions they offer do too, retailers have more and more opportunities to not just advertise on these services – such as Disney+’s ad tier offerings, but to reach relevant audiences with shoppable ads more effectively. For example, a technology retailer could use a CTV-based shoppable ad to showcase a range of products, and provide information on the local store consumers can use for a click-and-collect purchase. It could even be as simple as buying a pizza for delivery, and it can help to reduce the sales funnel down to just one click.
Making the TV a way to shop
Streaming has firmly become a staple in consumers’ homes, with over 20 million UK households having access to at least one paid service. However, that doesn’t mean consumers are signing up for the premium, ad-free tiers. According to Kantar, 60% of new subscriptions to Netflix in the last quarter were for its cheaper, partially ad-funded tier, presenting a huge opportunity for retailers to connect with new and engaged audiences.
Furthermore, the ability to personalise and engage with those audiences, especially niche groups, is typically higher than on traditional TV channels – notably on special interest Free Ad-Support TV (FAST) channels. It can be a valuable way to identify the type of viewer faster and with less investment. Through the TV, it is possible to reach consumers when they are already engaged in the screen they’re watching, and it makes the remote in everyone’s hand a shoppable unit, with unique technology integrations to expedite the buyer’s journey. It is this level of convenience that promises so much for the future of shopping, offering the chance to reduce the sales funnel down to just one click.
How retailers can take advantage of shoppable ads
Our research at Roku has revealed key criteria for creating an effective shoppable ad. For example, it is important to get the right advert in front of the right audience. Data and ad targeting is crucial here, and machine learning helps to optimise the process by examining prior consumer engagement. It also creates opportunities to optimise campaigns live, and in the future. By having actionable data on how an ad is driving sales, retailers can focus on the most relevant audience or products that are delivering conversion. They can also take those learnings to ensure future campaigns perform better in a way that TV historically simply could not offer. It’s the perfect balance between data and insights, and powerful brand awareness.
From internal research and working with retail partners, Roku has identified three key factors that can help a shoppable ad campaign perform well on CTV.
The future of shoppable TV
Although it’s in its infancy, the retail media sector is growing at a rapid rate. According to GroupM, the world’s largest media investment company, the sector grew by 9.8% globally in 2023 and is expected to increase by another 8.3% this year. For retailers who are facing the dual challenges of rising costs and less purchasing power from consumers, retail media could be the revenue stream that might ease their financial woes – and it’s no surprise retail media has been heralded as the third wave of digital advertising.
Yet it’s the power of connected TV and streaming services that are the real enablers of the shift we’re seeing. They already create opportunities to build global brands, but with shoppable ads they can help retailers and their partners drastically reduce the friction in the sales funnel by reaching engaged and interested audiences on the biggest screen in the home.
Author
Mike Shaw, Director, International Ad Sales, Roku
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