Shopping from the sofa: A CTV advertising playbook for retailers

With TV viewing reaching a tipping point, where digital is overtaking linear, there are immense opportunities for retail brands to advertise on connected TV. Sean Popen, EVP at Matterkind shares learnings for brands looking to add CTV to their marketing mix so they can bring the shopping experience into the living room.

We’ve reached a pivotal point in time where digital video is surpassing traditional TV.

Linear TV is predicted to drop to less than half of daily viewing in the US for the first time this year, as the ongoing shift to digital reaches its inevitable tipping point. While some of this digital video viewing involves mobile devices, a considerable proportion takes place on connected TVs (or CTV), especially as big-screen events such as live sports are increasingly available to watch via digital streaming services.

This shift in the linear-digital balance means every brand should be thinking about how to incorporate CTV into their overall marketing mix, especially as TV viewers are increasingly favoring ad-supported models over subscriptions. And many brands are already beginning to shift budget to this channel, particularly in the CPG sector where over half of online video ad impressions went to CTV last year.

But this situation brings a particularly exciting opportunity for retail brands, because the rise in CTV viewing corresponds neatly with the emergence of shoppable CTV ads. Walmart is one of the first retailers to test these out in partnership with Roku, but where these brands lead others are sure to follow. With the combination of growing viewership and shoppable ad formats, CTV gives retailers everything they need to bring the shopping experience into the living room.

For retail brands looking to include CTV in their marketing mix, here are some of the lessons we’ve already learned that you can benefit from.

It’s all about the customer experience

One of the biggest benefits of CTV for retailers is that it can deliver a truly full-funnel experience. The shopper can discover your brand, learn more about it, explore your products, and then make a purchase – all without moving from the sofa.

But to make this full-funnel experience work it needs to be simple and streamlined. We’re all so used to the ‘single click-to-buy’ style experiences we get with the likes of Amazon, any friction in the process is sure to lead to abandoned carts.

Streamlining the purchase process itself is a good place to start because, let’s face it, entering credit card details with a remote control isn’t easy. One option is to shift the transaction seamlessly to the mobile device the viewer almost certainly has on-hand. On-screen QR codes are a basic but effective way to do this, or alternatively the remote can be used to trigger a push notification to the CTV app on the shopper’s device so they can be connected directly to the checkout.

Some SVOD platforms that allow shoppable ads are taking a different approach to streamlining the payment process. They’re beginning to enable instant transactions within the TV environment through prior payment history, which really does take CTV shopping into one-click territory.

Of course there are other ways to keep the process simple, especially while shoppers are still getting comfortable buying via TV and can be easily dissuaded from completing the purchase. Focusing on promoting lower cost products – things that make good impulse buys – is one effective strategy, as shoppers won’t have to put so much consideration into the cost. And making sure there’s a free delivery option is another essential.

You can measure your outcomes

Another great thing about CTV advertising is that its outcomes can be measured in real time, so retailers can see the immediate impact of their campaigns and optimize to specific KPIs.

The first task then, is to define what it is you are trying to achieve with each campaign and set your KPIs accordingly. It might be that you want to drive specific actions, such as products being added to a cart, landing page views, or sales. Or you may want to gain incremental reach, getting your ads in front of households within a specific audience group over and above your base linear TV buy.

What’s more you can even guarantee these outcomes by buying CTV ads on a performance basis, so you only pay when they are achieved. CTV performance marketing is a rapidly growing channel, with impressive conversion rates and ROAS, and it is growing in popularity at a time when overall marketing budgets are squeezed.

We’re in a test-and-learn phase

CTV advertising isn’t necessarily there to replace the TV campaigns you’re already running. It's a way to augment what you're running in linear and reach new audiences. The ideal budget allocation between formats will vary by brand, but you’ll need to follow the example of the CPG brands and start shifting some spend into CTV to test the waters.

Now is the time to try out a variety of ad formats, buying models, and KPIs to see what works for you. You’ll also want to test a variety of publishers and content types to see what’s most effective for your brand. Will your products sell better alongside wildlife shows or true crime documentaries?

There are already a wide range of opportunities to test in the CTV space, but the critical thing is to compare apples to apples when you’re assessing the outcomes. Different platforms and publishers may provide different reporting so it’s important to find a way to aggregate those metrics and get meaningful comparisons.

With digital video viewing about to surpass linear, and CTV growth continuing, there’s going to be huge innovation in the space over the coming months. Forward-thinking retailers are going to be building their strategy around CTV and bringing the full shopping experience to the living room, so now's the time to get started.