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New York – September 17, 2024 – In a landmark study, “Unconnected Commerce: The Disconnect between Brands and Consumers in Digital Video Shopping“, and Interactive Advertising Office (IAB) analyzes the rise of Commerce Video, as it found that 70% of digital video advertisers are already using Commerce Video and almost all plan to spend more in the future.
The study, carried out in collaboration with the research consultancy Alter Agents, aims to define Commerce Video and highlight the growing importance of this advertising format in a climate where the purchase funnel is changing radically as consumers condense product discovery and purchase in a 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 results such as 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.”
Video Commerce definition
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 the vernacular of consumers or advertisers, but it is growing among both groups.
In fact, almost all (95%) Commerce Video advertisers use these ads more often now than other media to drive purchases. Additionally, three-quarters of consumers feel that ads are more relevant to their buying process than other types of advertising, and that Commerce Video helps them make better purchasing decisions overall.
According to the IAB, Commerce Video refers to digital video ads that are designed to drive action from a targeted audience. These videos include a clear call-to-action that guides the consumer through the purchase journey, whether generating leads or acquiring new customers. Examples of qualifying calls to action include “follow”, “subscribe”, “shop now” and “buy”.
“Almost all of the advertisers we surveyed plan to increase their spend on Commerce Video in 2025, so it’s critical that we, as an industry, have a unified definition of 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. Clearly, Commerce Video is not a blunt tool. There are nuances that brands have to be taken into consideration.”
Misalignment on Video Commerce between Consumers and Advertisers
While brands are integrating Commerce Video into their media strategies to drive engagement and purchase results, there is often a misalignment between how consumers prefer to shop with video and how advertisers create and deliver these ads.
According to the study, advertisers are overconfident when it comes to implementing Commerce Video campaigns. Almost all advertisers (96%) feel their messaging strategies are effective in driving purchases. However, 7-in-10 consumers say they feel annoyed or negative every month or more often with Commerce Video ads, and a third at least every week. In fact, these poor experiences can lead to negative reactions from consumers, such as the reaction of social media, switching to competitors, and canceling services, resulting in lost sales.
Alignment between consumer experience and Commerce Video campaign activation is paramount. Advertisers have the opportunity to better align on these strategies, including refining their messaging, campaign timing, delivery throughout the purchase journey, and more:
| Advertiser’s current approach | Advertiser Opportunities |
| Advertisers primarily use Commerce Video for lower funnel tactics, with 69% citing that it does not play a role in inspiring discovery. | Consumers prefer the discovery of the brand to be combined with the purchase. 64% of consumers agree that Commerce Video ads are helpful when they start thinking about a purchase. |
| Almost all (93%) of advertisers believe that Commerce Video campaigns only affect consumers when they are in a “shopping mood.” | However, 70% of consumers prefer to watch Commerce Video ads when 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 ads long between 30 and 60 seconds, which gives them the proper time to digest 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. | More than 70% of consumers find Commerce Video ads more repetitive than other types of advertising, citing this as their top frustration. Advertisers should align goals for optimal messaging frequency in CTV and online video strategies. |
| Advertisers underestimate the influence of creator videos, with only 40% targeting creator/influencer videos for their Commerce Video campaigns. | Consumers say that creator videos are one of the most influential sources for them when shopping. |
“While many marketers believe that their Commerce Video advertising strategies are effective, consumer sentiment indicates 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 results. If advertisers adjust their approach to market as the study indicates, the future is bright for Commerce Video,” concluded Cohen.
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 more than 1,000 consumers and 300 marketers combining quantitative, qualitative and ethnographic research to generate these findings.
About IAB
U Interactive Advertising Office enabling the media and marketing industry to thrive in the digital economy. Its membership includes more than 700 media companies, brands, agencies and technology companies responsible for selling, delivering and optimizing digital advertising marketing campaigns. The trade group fields critical research on interactive advertising, while also educating brands, agencies and the wider business community about the importance of digital marketing. In affiliation with the IAB Tech Lab, IAB develops standards and technical solutions. IAB is committed to professional development and raising the knowledge, skills, competence and diversity of the workforce across the industry. Through the work of its public policy office in Washington, DC, the trade association advocates for its members and promotes the value of the interactive advertising industry to legislators and policy makers. 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 changing 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 the challenges brought by trends such as buyer promiscuity and brand narcissism. The company’s immersive approach and unique methodology has helped brands like Snapchat, YouTube, Audacy, Viking Cruises, Pinterest, and others achieve powerful and actionable insight. More at www.alteragents.com.
Contact IAB Media
Kate Tumino Dougherty / Brittany Tibaldi
551-265-2825 / 347-487-6794
[email protected] / [email protected]
Alter Agents Media Contact
Marie Melsheimer
+1-541-815-3951
[email protected]
