Report Defines 'Commerce Video' and Unveils Solutions for Ideal Commerce Video Ad Strategies
NEW YORK, Sept. 17, 2024 -- In a landmark study, "Unconnected Commerce: the Disconnect between Brands and Consumers in Digital Video Shopping," the Interactive Advertising Bureau (IAB) analyzes the rise of Commerce Video, as it found 70% of digital video advertisers are already using Commerce Video and nearly all of them plan to spend more in the future.
The study, conducted in partnership with research consultancy Alter Agents, aims to both define Commerce Video and highlight the growing importance of this ad format in a climate where the purchasing funnel is radically changing as consumers condense product discovery and purchasing into one seamless experience.
"As the purchase journey collapses, digital video is no longer just an awareness and consideration tool, it is now a critical strategy in driving business outcomes like sales, store/site visits, leads, downloads, etc.," said David Cohen, CEO, IAB. "This report found that while brands are embracing Commerce Video, there is room to improve the experience based on consumer needs and preferences. Commerce Video works - this study reveals how to unlock its full potential."
Defining Commerce Video
With digital video––Connected TV (CTV), Social Video, and Online Video (OLV)––dominating consumers' digital media consumption, brands are capitalizing on Commerce Video as a powerful way to engage with them at scale. The term Commerce Video is not part of consumers' or advertisers' vernacular, yet it is surging amongst both groups.
In fact, nearly all (95%) Commerce Video advertisers use these ads more often now than other media to drive purchases. Additionally, three-quarters of consumers feel that the ads are more relevant to their purchase process than other ad types, and that Commerce Video helps them make better purchasing decisions overall.
According to IAB, Commerce Video refers to digital video ads that are designed to drive action from an intended audience. These videos include a clear call-to-action that drives the consumer into the purchasing journey, either generating leads or acquiring new customers. Examples of qualifying calls-to-action include "follow," "sign up," "shop now," and "purchase."
"Nearly every advertiser we surveyed plans to increase their spend on Commerce Video in 2025, so it's critical that we, as an industry, have a unified definition for what this medium does and how it should be used," added Chris Bruderle, Vice President, Industry Insights & Content Strategy, IAB. "While extremely effective, if used incorrectly, Commerce Media can be detrimental to brand loyalty and ultimately sales. Plainly said, Commerce Video is not a blunt instrument. There are nuances that brands need to take into consideration."
Misalignment on Commerce Video between Consumers and Advertisers
While brands integrate Commerce Video into their media strategies to drive engagement and purchase outcomes, there is often a misalignment between how consumers prefer to shop using video and how advertisers create and deliver these ads.
According to the study, advertisers are overconfident when it comes to deploying Commerce Video campaigns. Nearly all advertisers (96%) feel their messaging strategies are effective at driving purchases. However, 7-in-10 consumers report feeling annoyed or negative monthly or more often with Commerce Video ads, and one-third at least weekly. In fact, these poor experiences can lead to negative consumer reactions such as social media backlash, switching to competitors, and unsubscribing from services, resulting in lost sales.
The alignment between the consumer experience and Commerce Video campaign activation is paramount. Advertisers have an opportunity to better align on these strategies, including refining their messaging, campaign timing, delivery throughout the purchasing journey, and more:
Current Advertiser Approach | Advertiser Opportunity |
Advertisers primarily use Commerce Video for lower funnel tactics, with 69% citing that it doesn't play a role in discovery inspiration. | Consumers prefer brand discovery to be combined with shoppability. 64% of consumers agree that Commerce Video ads are helpful when they're starting to think about a purchase. |
Nearly all (93%) of advertisers think Commerce Video campaigns only affect consumers when they are in a "shopping mood." | However, 70% of consumers prefer to see Commerce Video ads when they are relaxing at home. |
Advertisers tend to lean towards shorter Commerce Video ads, with the most used length being less than 15 seconds. | When making purchase decisions, consumers prefer Commerce Video ad lengths between 30 and 60 seconds, which gives them the proper time to digest the detailed product information, educate themselves, and make a purchase. |
91% of advertisers use retargeting strategies to repeatedly reach consumers with messaging through Commerce Video ads. | Over 70% of consumers find Commerce Video ads more repetitive than other ad types, citing this as their top frustration. Advertisers should align on goals for optimal messaging frequency across CTV and online video strategies.
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Advertisers undervalue the influence of creator videos, with only 40% tapping into creator/influencer videos for their Commerce Video campaigns. | Consumers say creator videos are one of the most influential sources for them when shopping. |
"While many marketers believe their Commerce Video ad strategies are effective, consumer sentiment would indicate that there is significant room for improvement. There is a delicate balance that advertisers must walk when it comes to campaign targeting, timing, and delivery to achieve optimal outcomes. If advertisers adjust their go-to-market approach as the study indicates, the future is bright for Commerce Video," Cohen concluded.
The full "Unconnected Commerce: the Disconnect between Brands and Consumers in Digital Video Shopping" is available here.
Methodology
To create the report, IAB partnered with Alter Agents to conduct a comprehensive study of over 1,000 consumers and 300 marketers combining quantitative, qualitative, and ethnographic research to generate these results.
About IAB
The Interactive Advertising Bureau empowers the media and marketing industries to thrive in the digital economy. Its membership comprises more than 700 leading media companies, brands, agencies, and the technology firms responsible for selling, delivering, and optimizing digital ad marketing campaigns. The trade group fields critical research on interactive advertising, while also educating brands, agencies, and the wider business community on the importance of digital marketing. In affiliation with the IAB Tech Lab, IAB develops technical standards and solutions. IAB is committed to professional development and elevating the knowledge, skills, expertise, and diversity of the workforce across the industry. Through the work of its public policy office in Washington, D.C., the trade association advocates for its members and promotes the value of the interactive advertising industry to legislators and policymakers. Founded in 1996, IAB is headquartered in New York City.
About Alter Agents
Alter Agents is a full-service strategic market research consultancy reimagining research in an era of shifting decision making. Deep creative thinking and innovative solutions help Alter Agents' clients understand consumer needs. The Alter Agents team believes that research must adapt to help brands overcome challenges brought by trends like shopper promiscuity and brand narcissism. The company's immersive approach and unique methodology has helped brands such Snapchat, YouTube, Audacy, Viking Cruises, Pinterest, and more gain powerful, actionable insights. More at www.alteragents.com.
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