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cover story Spring 2024 and p8-11
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Most importantly consumers seem to like it. Over half of CTV
users wish they could shop online using their TV, according to a recent survey
by LG, with 63% wishing they could see store inventory on their TV.
An August 2023 report from the US-based Video Advertising
Bureau (VAB) found that viewers who interact with a shoppable ad are inherently
more likely to then make a purchase.
The survey found more than one third (36%) of audiences have
interacted with shoppable ad QR Codes, and 67% have interacted with the
"click to receive info to your email or device" ad format.
Another survey (by Lucid), found 75% of viewers preferring
to see an interactive TV ad than a standard commercial, particularly when they
could find out more information about a product or redeem a special offer.
That stat was quoted by Disney in its launch earlier this
year of a trial that allows consumers to purchase products on Disney+ and Hulu,
by connecting the stream to a shopping cart using Gateway Shop.
Shoppable and
interactive ad formats have taken off in the U.S. where FAST channels have
soared in popularity. In LG’s poll 78% of CTV users regularly use FAST
apps, and 59% preferred FAST over paid streaming services, “making FAST a
critical part of every media plan.
Having launched its ad-supported Prime Video service, Amazon
is predicted by Omdia to generate more than $2bn in incremental ad revenue this
year and is in prime position to lead the shoppable ad market. Prime Video
experimented with shoppable ads during the Black Friday NFL
game in December. Ads featured on-screen QR codes linking to Amazon’s
Black Friday deals, enabling viewers to scan codes with mobile devices to go
straight to the offers.
“While
shoppable ads were a novelty a couple of years ago, brands are now comfortable
allocating big budgets to CTV,” says Roxanne Harley, Head of Strategy &
Client Development, at Dutch digital media platform Azerion. “The next step in this adoption is
testing interactive ad formats in more premium TV and publisher environments.
Expect more innovation and testing of interactive ad formats in the future,
both in the UK and worldwide.”
The “elite
player” according to Amagi, is the QR code. “During the pandemic people were at
home sitting with phones, 87% of folk are watching TV with second screens. It
is a perfect captive audience and now an opportunity to reach them,” says James
Smith, EVP & GM, Global Ads Sales & Programmatic, Amagi
LG calls them
a ‘must-have’ for ad creatives citing 70% of CTV users liking TV ads
with QR codes, and that 62% would scan them if exposed. Broadcasters including
Sky UK, ITV and NRK have begun to experiment by integrating QR codes into some
of their broadcast content.
“I’m really interested in how we build bridges between big
and small screen products, Tanja Skjoldborg Lindboe, Head of Product
Development, NRK TV, told the Northern Waves conference, adding that QR codes
were “the best way we’ve seen yet.”
Shopify, Walmart, Wendy’s and DoorDash are among retail and
commerce partners to leverage Roku Action Ads where consumer interactivity
involves sending a text, scanning a QR code, or making direct purchase.
Various factors are propelling the technology towards wider
utilisation.
“The increased familiarity and comfort with QR codes among
consumers is driven in part by their ubiquitous use during the pandemic for
contactless transactions and interactions,” says Mike Shaw, Director,
International Ad Sales, Roku. “QR code scanning is now faster and more
seamless, eliminating previous barriers to adoption. Also, the integration of
QR codes with CTV platforms offers a bridge between traditional broadcast media
and digital interactivity, presenting a compelling opportunity for advertisers
to shorten the purchase funnel between awareness and conversion.”
Taken together there’s every indication that the technology
is poised for broader acceptance.
Diving into the tech stack
An efficient CTV shopping experience relies on robust
back-end technical components, including flawless integration with e-commerce
platforms to enable real-time inventory updates and transaction processing.
“The backend system should identify relevant objects within
the video content, such as products or brand logos, to avoid an editorial
nightmare,” explains Bleuenn Le Goffic, VP Strategy and Business Development,
Accedo. The system then needs to pre-filter video frames to highlight shoppable
metadata. Last year, Accedo experimented with AWS to create an AI-powered
virtual product placement engine. “Having this type of system in place means
the backend can do the heavy lifting and lower the editorial investment
required to enable shoppable TV across all assets of a specific video,” she
adds.
Shaw points to advanced data analytics capabilities as essential
to track user engagement and optimise shoppable ad-campaigns while integration
with CMS enables dynamic insertion of shoppable elements into streaming content.
Another important element in the underlying technology are
codecs (AVC/H.264, HEVC/H.265, VVC/H.266) which “make it easier and more
affordable to use QR codes within more types of content,” says Geoff Gordon, VP
Global Marketing, MainConcept.
User experience is key
ITV was the first UK broadcaster to introduce a shoppable TV
service. Launched around Love Island in 2021, developed by The Take, and
on LG CTVs and with Boots as ad partner, its messaging was optimistic of
scaling the service. Yet ITV quietly abandoned the trial, perhaps because the
user experience wasn’t quite right.
“The best user experience is one that is seamless and
integrated with the addition of interactive elements, which allows the live
content and ad to share the same screen without interrupting the viewing
experience,” says Martins Magone, CTO, Veset. “To enhance the user experience
through external integrations such as a second screen, content providers need
to start considering the ways in which interactive features are best managed.”
Today, purchasing products from TV ads mostly occurs on
mobile, as 71% of CTV users are “always” holding their phones while watching
TV, according to LG.
If shoppable TV comes as an overlay to the actual video,
then Accedo recommend using a second screen for the least intrusive experience.
“The remote control can then be used to interact and action shopping for the
products that users see and find appealing on the second screen,” he says.
Roku is firmly in the remote camp. Since the remote control
is the primary interface through which users interact with their TV it
“provides a more immediate and seamless experience for consumers to engage with
shoppable content,” argues Shaw. “By incorporating shoppable functionalities
directly into the remote control, Roku can streamline the shopping journey and
enhance convenience for viewers, ultimately driving higher conversion rates for
advertisers.”
Voice and gesture activation offer further opportunities.
Voice-enabled shopping allows users to verbally command their CTV to add items
to their shopping cart or make purchases directly through voice assistants
(like Roku Voice). Gesture recognition enables viewers to interact with
shoppable content using hand gestures or motion controls, enhancing the
immersive shopping experience.
Integrating shoppable TV into live streams
Sports is a particularly attractive use case, with often
high viewer numbers and huge levels of fan loyalty. However, integrating
shoppable TV is a challenge.
“You don’t want to interrupt the live story,” says Smith.
“The second screen experience needs to be closely tied to what is happening on
the CTV. You can’t take viewers completely away from the show and expect them
to do a ton of research and come back to the show. So the creative needs to
trigger an activity. Sometimes it could be asynchronous – the user cued up to
complete a conversion later. In live that’s a good way to do it, provided you
can still demonstrate attribution.”
As well as the complexity of serving ads and products in
real-time, live sports such as football have an element of repetitiveness with
the same players on the pitch, often with the same goal scorers, “so for the
regular viewer you need to create a shoppable journey across many different
products and experiences to maximise the opportunities for engagement,” says Le
Goffic.
On the other hand, this year’s Superbowl was the
most-watched event since the moon landing in 1969 and highlights the
opportunity for getting live sports integrations right.
“Opportunities include capitalising on the high viewership
and engagement levels associated with live sports to drive conversions for
advertisers, enhancing the fan experience by offering exclusive merchandise and
interactive content during live broadcasts, and leveraging social media
integrations to facilitate peer-to-peer sharing and viral marketing
opportunities,” says Roku’s Shaw.
Providers and advertisers are already exploring how AI can
aid in recognising products and contexts in live video to enable instant
shopping interactions. Potential transactional behaviours are perhaps best
leveraged during moments of high engagement that could open new opportunities
for contextual-based advertising.
“By leveraging the flexibility and scalability of cloud
playout, broadcasters can exploit the tech even further with features such as
inserting QR codes into live streams, which is crucial for advertisers keen on
investing their CTV budgets in interactive ad formats,” says Magone. “Content
providers need to provide the tech that allows for real-time changes so ads can
be delivered in a range of formats based on data insights and viewer
behaviours.”
The evolution of interactive
Interactivity
isn't limited to QR codes. Peacock and Max have started using ‘pause
ads’ where ads play when the user pauses the content. Ads are delivered in an
unobtrusive way because the ad break is initiated by the viewer.
Advancements in ad tech have also made it possible to insert
ads that are displayed alongside the content. This removes the need for a
traditional ad break, thereby reducing the chance that viewers will disengage.
Veset’s AdWise solution uses dynamic squeezing technology to squeeze the
content to make room for the ad to display on the screen alongside the
programme.
For Magone, the next logical step from QR codes is to bring
interactive experiences directly onto one TV screen and create a “non-intrusive
yet engaging shoppable experience,” he says. “In-video style ads can
significantly shorten the path to purchase without interrupting the intimacy of
the live experience.”
Video overlay ads are an “exciting application” for adding
interactive features or placing the ads directly into the on-screen content,
says Gordon. “It’s like product placement, but instead what’s delivered will be
personalised to the viewer for a more engaged advertising experience.”
Shaw also points to AR overlays allowing users to visualise
products in their own environment before making a purchase. He says
‘gamification’ rewards viewers for engaging with shoppable content, encouraging
repeat interactions - which ultimately enhance the overall viewer experience
and driving higher conversion rates for advertisers.
Disney's
Gateway Shop allows viewers to send on-screen products to a second screen
without interrupting their streaming session. Harley judges this a good way to
think beyond the standard ad spot so audiences can receive information from
their TV to their smartphones and shop the products they see on TV.
“As exciting
as this sounds, looking at media planning and measurement across these new
formats would be beneficial so CTV ads don't have to do it all alone. My advice
to drive purchases would be to build a full-funnel advertising strategy with
omnichannel formats and measurement throughout for cost-effective reach and
conversions.”
Challenges
ahead
Creating a more robust shoppable TV experience entails other
challenges. For instance, balancing user experience with advertising content to
avoid overwhelming viewers with commercials “is crucial” deems Shaw.
Addressing privacy concerns related to the collection and
use of consumer data for targeted advertising is also high on the agenda.
Perhaps the most critical issue is relevance. Without it and the whole
shoppable media enterprise is sunk.
“The biggest mistake is failing to identify the right
message to the right user working within GDPR and privacy controls,” says
Smith. “We have a lot of information on users that will help placing the right
ad in front of them so there’s no reason to put a retail ad in front of a user
who has already purchased that product.”
The reasons why 70% of CTV users don’t scan QR codes on ads
is when the product is not relevant. “The key to success for Shoppable TV is
relevance, underscoring the need for advanced audience targeting,” states LG.
Shoppable TV experiences should create an higher degree of
personalisation and context. Smith says Amagi is focused on pioneering the
personalised EPG which will serve viewers a menu of 100-200 channels tailored
to specific interests and curated from potentially 5000 channels distributed
over CTV.
Even then, Smith says the industry needs to join the dots
down the funnel. “One of the most important things the industry needs to get
better at is attribution. When you get down the funnel in a situation where the
user is trying to convert via mobile phone or CTV then brand partners need to
be data to manage that attribution.
He also suggests there is a way to go before shoppable TV
ads are transacted programmatically. “We are not seeing massive CTV budgets for
overlays or interactive ad formats that are transacting programmatically.”
Educating advertisers and content creators about the
potential of shoppable TV and best practices for maximising ROI is essential
for widespread adoption.
CTV platforms with a large user base and registered methods
of payment are best positioned for this opportunity.
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