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Is shoppable video the next revenue stream for OTT services?

Is shoppable video the next revenue stream for OTT services?

How many times have you watched a TV show and seen a product that instantly caught your eye? And then proceeded to go on a wild goose chase across Google Search—trying to find and buy the exact product that was featured? You’re not alone. In one case, Crate and Barrel saw its sales for a particular wine glass surge 20 times its regular weekly volume after the item was featured in ABC’s drama Scandal as the glass most often favored by the show’s protagonist. Now imagine being able to click on that wine glass, add to cart, and check out—all within the program or after the program. This is the value proposition behind the concept of shoppable video. 

The shopping avenue in online TV remains largely untapped. But there is a strong interest in shoppable TV opportunities, especially in Asia. According to our 2019 Asia OTT Research Report, an average of 30% of users in Asia are open to purchasing products as seen on TV post-program, while 40% might be open to the concept—representing a potential market size of 70%.

It’s clear that there’s a high revenue potential for shoppable TV. Here are the top four strategies OTT players and advertisers should implement in order to launch successful shoppable video campaigns.

Incorporating shopping into the viewers’ experience

In Asia, ecommerce adoption is at an all-time high, with the industry predicted to reach $102 billion in value by 2025. The majority of consumers in this region don't live near a premium retailer, so the process of discovering new products usually occurs through digital channels and on mobile. 

Globally, people are inspired by the products in the content that they watch, but currently, there is no easy way to direct that person to purchase. Typically, the consumer’s process involves Google Search and surfing through a myriad of sites before they find and purchase the product they seek. (But then there is the whole aspect of whether they are buying the legitimate, original product or a less-expensive replicated edition, but we won't get into that). If online TV platforms and advertisers could shorten that search-and-buy cycle, and make the experience seamless and convenient, we are betting that many consumers would be open to shoppable video as part of their viewer experience. 

Designing a less-intrusive experience

Shoppable video should aim to enhance the viewing experience, but if not designed carefully, it can backfire. Today, videos use dots or cues as a way to indicate the interactive element. But when interactive cues or dots are added into a TV program, it can be off-putting and distracting. OTT TV providers need to design a less-intrusive experience whereby they can advise viewers that the shoppable element is available in the program that they are about to watch. The cues can appear as part of the opening or end credits, or appear as picture-in-picture style near the scrubber bar—and can also be switched on or off, much like switching on subtitles. 

Creating branded content in a direct, measurable way

Branded content is a relatively new emergence in TV programming. NBC Universal teamed up with ecommerce fashion giant Zalora in South East Asia to produce Style Me Now, a TV show that focuses on makeovers. The premise here is that products featured on the show would drive online traffic and online sales on Zalora’s site, but the question remains if there is actually a direct correlation between an episode and product sales. Can Zalora measure this collaboration with solid metrics? My guess is no, not really. 

Brands have long been subtle when it comes to product placement in programming, but this does not provide any meaningful data beyond brand impression data. With shoppable video, content owners can track click-to-view, click-to-buy, and click-to-share interactions—and ultimately, get a clearer view of conversion data. 

Branded content within TV shows or movies that have an interactive element—which enables viewers to either seek out more information about the product onscreen or click-to-buy—could change the way brands and content owners monetize using this advertising format.

Diversifying revenue streams in the era of streaming wars

For OTT operators, customer acquisition and retention is a major challenge. Business models that are subscription-centric, ad-funded, or a combination of both only offer a sustainable business model to a certain extent. Shoppable video opens up a completely new revenue stream potential, while also helping to differentiate OTT service offerings in the era of streaming wars. 

By marrying TV with commerce and adding interactive elements, OTT TV operators can explore the measurable impact of shoppable video. This video can link directly to the point of purchase—enabling OTT operators to go beyond native OTT advertising. Conversely, advertisers are presented with another innovative way to market their products and uncover user buying preferences—all with the trackable conversions and audience data they crave. The possibilities with branded content and shoppable video commerce could be endless, and we are just at the starting line.

Ready to set your shoppable video strategy in motion? Speak to our OTT experts today.

Want to learn more about launching a shoppable video experience?