As the economy continues to fluctuate, it’s crucial for brands to spend every marketing dollar wisely to effectively reach their target audience. Gartner estimates that marketing budgets have dropped from an average of 9.1% of company revenue in 2023 to 7.7% in 2024. Furthermore, only a quarter of Chief Marketing Officers said they had the budget to execute their marketing strategies this year.
The silver lining is that a new era of shoppable ads has emerged, poised to give retailers’ marketing budgets a bang for their buck by providing shopping behaviour insights in greater detail while simultaneously enhancing customers’ shopping and user experience.
In Australia, TikTok and News Corp are leading the shoppable ads revolution, with the former enabling users to make purchases from uploaded and live videos with a single click, and the latter adding a similar feature to its platforms, allowing customers to buy products within editorial content. Global ecommerce agency KINESSO Commerce also recently joined the ranks, launching ‘ShopNow’ to enable consumers to buy instantly from its commerce partners on the open web.
These features allow shoppers to easily turn their desires into immediate action at the moment of inspiration, creating an enjoyable advertising experience for the consumer. Amazon reports that interactive video ads with a clickable overlay can generate almost 20 times more interactions than ads with QR codes.
Shoppable ads also integrate product discovery and purchase into a viewer’s experience – offering instant gratification with minimal friction. This effectively collapses the e-commerce funnel, driving tangible outcomes, such as capturing leads, influencing consideration, and increasing purchase intent.
Traditionally, ads redirect shoppers from social media experiences to landing pages and then to a merchant’s website. This is an unnecessary interruption to the shopper’s user experience.
Despite shoppable videos becoming increasingly popular, there is still a lack of broad education on and awareness of how to use them effectively. With content becoming increasingly available at our fingertips, there is a real opportunity for brands to offer compelling video experiences for their clients and get the audience clicking.
Shoppable ads are the secret sauce for brands to transform customer experience and achieve greater cost performance for their budgets. Customisable interactions and shoppable content can also empower brands to build new experiences for those consuming news content.
Let’s look at how shoppable ads can elevate customers’ shopping experiences and brand campaigns:
- Establish deeper consumer connections
Shoppable ads unlock exciting opportunities for customer engagement. Brands that commit the necessary marketing investment can establish deep consumer connections via immediate gratification, accelerating growth among their intended market. The technology enables personalised shopping experiences through unique, individual stories, engaging users on a more emotional level and thus increasing the likelihood of a purchase.
2. Build hyper-relevance for Gen Z audiences
Gen Z shoppers are increasingly swayed by personalised recommendations based on their interactions. In fact, Deloitte research has revealed that personalisation is a key differentiator among this generation, with consumers valuing a brand that can anticipate their preferences and tailor their experiences to suit their needs. This is where shoppable ads are a real winner, delivering curated experiences based on individual spending patterns.
3. Plug and play
More advertisers are looking for plug-and-play marketing solutions that can easily integrate into an existing technical stack and supply chain network without any major overhaul. With shoppable videos, brands can do just this and create a seamless purchasing journey, allowing customers to watch, browse and add-to-cart without interrupting their viewing experience. For example, Vogue Australia has used interactive video functionality to enable customers to ‘shop the look’ and purchase items directly from the video with minimal disruption.
4. Drive more accurate sales attribution
Shoppable ads enable brands to track user behaviour through digital signals for more accurate sales attribution and prevent publishers from losing their audience and valuable data to content and affiliate programs. Adding call-to-actions (CTAs), product catalogues and the checkout function to videos makes it easier to convert interest into sales. Brands can easily elevate their retail campaigns and put them ahead of their competition.
5. Access to valuable metrics
Data is the lifeblood of shoppable ads, powering a lift in key performance metrics, like product discovery rate, purchase conversion rate and average order value. These insights help advertisers optimise their campaigns, drive ROI and advise future product development. With more accurate data, better-informed brands can also create a better user experience through a deeper understanding of shopping behaviour.
For brands who want to elevate their marketing campaigns and create additional revenue streams, shoppable ads offer an enormous opportunity to win customers and increase sales. Amid unprecedented competition, the time is ripe for retailers to capitalise on the immense potential of shoppable formats to bridge the gap between inspiration and acquisition, connecting content and commerce.
Nick Morgan is CEO & founder of Vudoo.