New York – At Advertising Week New York a panel of industry experts shed light on how retail media networks and connected TV are a promising pairing, as the two offer a symbiotic relationship and new opportunities for brands and advertisers.
And the marriage of retail media and CTV is poised for growth. According to a recent report from eMarketer, U.S. retail media ad spend on connected TV is expected to total $813 million this year. What’s more, it’s projected to grow by nearly seven times by the end of 2027 to $5.63 billion.
The new but growing area is one where Insider Intelligence cited benefits to all parties. The outlet said retailers benefit by expanding reach with off-site advertisements on CTV, streamers get retail media networks’ first-party data for more effective ad targeting, while brands can move beyond search to reach customers sooner in the shopping journey funnel.
Speaking Tuesday at AWNewYork, Ami Lathia, director of Off-Platform Ad Products at Target’s retail media business Roundel, discussed how retail media networks continue to evolve and aim to reach consumers where they’re spending time, while blending digital opportunities in terms of how consumers interact. She cited Target data that found 35% of the retailer’s guests either use the Target app or website as they’re browsing in-store.
As consumer behavior changes for browsing or purchasing a product ,“it becomes extremely important that retail media networks also continue to evolve in their offerings to meet the needs,” Lathia commented. “And I would say CTV is the rising star in here.”
Retail media networks started to come on the scene more heavily during digital boom and is essentially provide a way for retailers, such as Target to sell ad space to their brand partners on their owned and operated channels, where advertisers are close to the point of purchase and get access to first-party customer data. Amazon may come to mind as a massive national player and dominant recipient of retail media ad spend.
When Covid came along, it changed the media consumption of those consumers retailers were trying to reach and behaviors in the marketplace, birthing many new retail media networks as a result, according to Amie Owen, US Head of Commerce at media agency UM Worldwide.
During the panel, she noted how data and tech come into play to understand the consumer shopping journey and ensuring there aren’t extra steps in their process.
Roku is one of the streamers most prominently pursuing retail media and data sharing partnerships, including with Best Buy, Instacart and Kroger, as well as pilots with Walmart. Disney’s Hulu also partnered with Kroger to share first-party shopper data to target streaming viewers, while NBCUniversal teamed up with Walmart to test a retail media pairing for ads within livestreaming sports on its Peacock streaming service.
Why retail media is leveraging CTV
As to how and why brands and retail media clients are leveraging CTV, Lathia highlighted three primary reasons. One, she said using CTV means including an additional high-attention touchpoint.
To back that up, she cited a recent Target survey of nearly 3,000 shoppers that found 60% of Target guests stated they’re often or always engaged when they’re watching content on TV.
“That is a highly engaged audience that you’re talking about that you want to leverage on this platform,” she said.
Second, CTV offers advertisers precise audience targeting and measurement thanks to data. Finally, she explained that clients can use the same audience not only for CTV but across their entire digital media strategy.
“Thereby you can help push your consumers further down into the conversion funnel," she said. “All in all I would say a win-win situation and why we are seeing more clients turn to CTV as part of the marketing mix, and to truly deepen that connection with our guests.”
In an earlier separate interview with StreamTV Insider, Mark Rose, senior director of market development at TransUnion explained that with retail media networks, brands aren’t simply evaluating the performance of campaign, but rather value of the holistic relationship with a retailer, which could also include things like in-store promotions and online efforts.
Advanced creative, interactivity drives performance for CPG on CTV
And while television is often thought of as a lean-back experience, Innovid’s Dan Mouradian, VP of Global Client Solutions, pointed out that with CTV advertisers get the benefits of digital, such as precise targeting and personalized data that help fuel the impression.
“Then you are afforded those opportunities to engage with that creative in a way that we’ve been doing in digital for many, many years,” he commented.
He cited a joint study by Innovid and Roundel on CTV and commerce, where a surprising finding was “how well advanced creative performed in that [CTV] space.”
Specifically looking at CPG (consumer packaged goods) and the use of CTV, Innovid studied more than 110 billion impressions across its delivery footprint and found about 51% of CPG advertisers are advertising in CTV. And from a performance and ad creative perspective, he said that when leveraging advanced creative, interactive formats “performs much better than standard creative” or repurposing a broadcast spot in the CTV space.
“This is an advertiser buying a 15 or 30 second spot, engaging with creative that allows you to move through product carousels or a discovery of different products within a CPG portfolio,” Mouradian, explained. The timeline calculates user engagement from the moment they use their remote to the time they close the experience, with interactive creative showing on average “a huge increase in the time spent with a brand.”
He cited a 93% video completion rate for advanced interactive formats, which is about 10% higher than standard video, and said interactive formats on average delivered 92 seconds of additional time earned. Dynamic creative also performed well, according to Mouradian, with an average of 10% higher completion rate.
Users aren’t only paying attention on CTV, they’re also taking action.
And as part of the earlier mentioned shopper survey, 79% said they watch streaming TV over linear and cable, while around 21% purchase products from streaming ads.
“So the performance is there, and I think that’s the really interesting thing,” Mouradian commented.
In addition to first-party data that helps fuel impressions and creatives, Ellen Mulryan, senior director of Retail Media Partnerships at the Trade Desk, explained how that retail and CTV data allows brands to become much more precise in how they leverage CTV budgets. That is particularly important on CTV because, as a premium channel, clients want every impression “to work really hard for us.”
Mulryan noted some advertisers are bringing interesting predictive modeling techniques to the CTV channel and gave the example of a diaper brand. In legacy thinking, she said brands may be trying to reach an age demo, which can waste a lot of impressions. But with CTV and retail data coming together, brands can zero in to try and only reach people who have purchased in that category in the last six months or three years. Or with predictive modeling, target consumers who haven’t yet but the retailer knows are about to purchase based on data such as joining a registry and purchasing maternity clothes.
“You can shift those CTV impressions to make sure that they’re really, really specific to who you want to reach,” Mulryan said. “Just making them more effective than kind of the old legacy ways that we’ve been thinking about buying.”
Challenges remain
While retail media and CTV appear to make a fortuitous pairing for marketers, panelists acknowledged there are still challenges to overcome.
Owen pointed to the need for a lot of “test and learns” in different categories to understand the space.
“Commerce is a strategy. So we want to make everything shoppable everywhere all the time for that specific audience,” she said. That means the need for understanding behavior and seeing how CTV and retail media impacts goals, which will vary by category.
The second challenge is around data, with Owen emphasizing the need to create standardization or at least taxonomy to understand what’s being measured. The other challenge is understanding the complexity of CTV, what it drives and whether advertisers are not only targeting the right person based on the right data, but then also delivering the right message that’s curated for them.
“The consumer behavior and the media consumption, we’re going back nowadays, to I want to see an ad just for me where I am, or else I don’t want to be surrounded by the noise,” Owen said.
And in the CTV space, panelists discussed how brands can see metrics they didn’t use to have at their disposal, ingest data and leverage it to optimize campaigns in-flight, rather than having to wait over a month to change tactics.
“To be able to do that with CTV, again that really premium channel that you need to work really hard for you, to be able to understand those metrics in flight so that you influence how the remainder of the campaign goes – is really exciting,” Mulryan said.