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Advertisers Are Still Slow to Exploit Shoppable Video

18 February, 2020 

Karoline GrossShoppable video ads are by no means new – YouTube for example first debuted its shoppable format back in 2015. But we’ve seen some interesting developments in the space in the past year or so. Instagram has debuted a checkout feature within its app, Netflix has experimented with ‘choose-your-own-adventure’ style content, and broadcasters including NBCUniversal have trialled bringing shoppable ads to the TV screen.

But many of the brands and advertisers making use of the format still aren’t really using it to its full potential says Karoline Gross, founder and CEO of Smartzer, a platform which enables shoppable and interactive ads.

Who is using shoppability?

Smartzer creates interactive overlays which brands can place on top of their existing video assets, either allowing them to add shoppability to the ad (where a user can click on an item within the video to see its price and description, before being sent to an online store to complete a purchase), or other interactive elements. These videos might be distributed on a brand’s own website or e-commerce store, on social media, or as a pre-roll or native video ad via a VPAID tag.

One of shoppable advertising’s most obvious restrictions is that it doesn’t suit all advertisers. It’s unlikely that a consumer will watch a car ad online and decide then and there to complete a purchase via a shoppable ad unit. And at the other end of the price spectrum, it’s similarly unlikely that consumers would buy fast-moving consumer goods from within a shoppable ad unit, since they would usually buy these from a third-party retailer.

Smartzer so far has largely targeted fashion and beauty brands like JD Sports, Sephora and Feelunique, since shoppable ads tend to work well for their objectives. “These high street brands and online retailers are quite driven by immediate conversion, and have lower price points” said Gross.

The company also works with luxury brands, as well as travel and auto brands, but these tend to opt for other forms of interactivity. “They use interactivity more for product discovery, and to plant memories about product details in their audiences’ heads,” said Gross. “For them, it’s more about leading customers to their site to find out more so that they might buy at a later date, and less about driving a sale there and then.” They might also use a softer call to action as a substitute for a purchase – an auto brand for example might invite the customer to book a test drive.

Shoppable advertising yet to reach its full potential

But many of these brands are still yet to make the most of shoppable advertising’s potential.

Firstly, many are still simply using existing video assets, and adding an interactive overlay on top. Gross says these are fine in most cases, but advertisers tend to see an increase in engagement and click-through rates when they create ads specifically designed with shoppability in mind.

“We see much better engagement with multi-brand, multi-product videos,” said Gross. “So it’s not just a video about a single product, it’s an entire shop. You might even have a video which has everything from furniture to beauty to fashion, and all of that is shoppable.”

Educational content performs well too. “If a brand takes a thirty second TV ad where they’ve tried to cram in as much as possible, and then makes that shoppable, that can be quite a hectic experience,” said Gross. Longer content, where users can click through certain features of a product to learn more, is better suited to interactivity.

But even when interactivity is used, many advertisers fail to make full use of the data that Smartzer feeds back to them, which Gross says can often be as valuable as the interactivity itself.

“We track every interaction that happens within the video,” says Gross. “So if the customer hovers over something, if they click on something, what that product is, which country they’re in, which distribution channel they’re on, what device they’re using, etc – we can feed that performance related data back to the advertiser.”

This data can be useful for demonstrating an ad’s effectiveness. But it can actually be off-putting for some marketers, and influencer marketers in particular according to Gross, as it exposes channels and ads that aren’t performing. “There’s probably a reason why a lot of advertising channels only report on things like impressions,” she said. “But if we want more impactful and relevant advertising, the only way we can really get there is by looking at these numbers, even if they’re not always great to look at!”

And even when advertisers are using the data, they aren’t always getting as much from it as they could. They’re increasingly looking to fold Smartzer’s data back into their own customer profiles according to Gross, which adds more value than simply using it to measure KPIs. But most aren’t yet using it to inform the ad’s creative production.

“We provide data showing where interactions went up and when they went down within the video, and heatmaps of where people are clicking and what they’re interested in,” said Gross. “That can be tied back into the video production side, but it’s a much longer process for that data to be built into the production process.”

Will we see shoppable TV shows and films?

Closing this gap between the commercial and production sides of a business could be a big challenge for bringing shopability to entertainment content too.

Netflix’s ‘Black Mirror: Bandersnatch’, aired at the end of 2018, highlighted the potential for combining interactivity and product placement. At one point for example, the viewer was invited to choose between two branded cereals as part of the episode.

Shoppable entertainment content, where a viewer could for example click on an item of clothing or furniture within a film or TV show and be led to an e-commerce store to buy that same product, has a lot of potential according to Gross. And in fact, this was actually the initial idea behind Smartzer. “I was living in LA and working on some production stuff, and thought this sort of functionality would be amazing because there’s so much money in product placement.”

But Gross soon discovered hurdles for the product. “I think for the kinds of things that people watch on TV, there’s still a very small pool of content where this kind of thing is relevant, or even possible,” she said. “The whole production system is really messy, and a lot of things used on set are bespoke, so audiences can’t actually buy them. Or shows might air globally, but the products they use might only be available in one country, which makes it hard to scale.”

And people working on the creative won’t always pay much heed to commercial teams’ requests. “You are dealing with super creative people who might say ‘You know what, I don’t care that you’ve got a deal with this company, I’m still going to wear my custom made outfit from my favourite vintage shop’, it’s quite a big nightmare.”

That’s not to say Gross doesn’t think shoppable entertainment content will ever come to fruition, given the size of the opportunity. But Netflix, which controls production as well as the tech, and Amazon, which does both while also running an e-commerce store, are likely to be the first movers.

“But if you’ve got a movie made by Warner Brothers which is now on HBO’s streaming service, for that sort of thing to be shoppable is probably quite far away,” said Gross.


About the Author:

Tim Cross is Assistant Editor at VideoWeek.
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