Video ads remain a hugely underutilized format for digital advertising, especially when it comes to e-commerce. Despite the fact that video platforms like YouTube, TikTok, and Instagram each have around 1 billion monthly active users, monthly video ad engagement barely hits dozens of millions of users.
According to KERV Interactive, only half of the 90 million unique users, which represent over 40% of U.S. digital consumers, were exposed to video ads from its advertising platform within a period of six months.
At the same time, the COVID pandemic has caused an irreversible, dramatic shift from the brick-and-mortar consumption model to a digital, “storeless” environment, according to the Interactive Advertising Bureau (IAB). As a part of this post-pandemic trend, analysts at UBS investment bank expect 50,000 store closures in the U.S. over the next 5 years.
Simply shifting to e-commerce is not enough these days. In a highly competitive e-commerce landscape with giants like Amazon and Alibaba, businesses smaller in scale may struggle to attract customers. That’s where Shoppable Videos become especially useful.
Shoppable Videos and “Shoppable Media” allow businesses of any size a variety of new opportunities to engage with customers. Livestreams, social commerce, and virtual consultations are only a few examples of fresh and hot forms of customer engagement in e-commerce.
Unlike the digital banner ad market, the video ad market is comparatively less saturated while offering more cost-effective and advanced functionality for e-commerce companies to reach consumers. According to research, videos increase product purchases by almost 150%.
Shoppable media reflect the leading trends not only in the digital space, but also in demographics. A study by McKinsey shows that adults in Gen Z, the most relevant age group for e-commerce, derive 75% of their influences from social media, online content, and celebrities.
Thus, the current digital trends, as well as the demographic shift, become long-term tailwinds for more immersive advertising experiences.
In the Western world, the “traditional” online advertising market is de-facto monopolized by Google with its set of marketing tools. Even though big tech companies like Amazon develop their own video marketing solutions, they remain exclusive for users of their e-commerce marketplaces, which limits flexibility for smaller businesses.
Nonetheless, shoppable media leave significant room for innovation. In Artifiqa, we are building an innovative platform to manage video content for online stores, Recomm.app. It’s available to businesses of any size, including the smallest ones, such as dropshippers. With this platform, online stores can use storytelling as a marketing tool to increase their sales. Another Artifiqa product, ReNett, is a “TikTok for shopping,” which introduces a whole new shopping experience for internet users.
Full Potential Of Shoppable Media Yet To Be Unleashed
Shoppable videos is probably the only digital marketing segment left where we can see the rise of marketing tools that are truly affordable, flexible, and advanced — all at the same time.
Unlike TV video ads and classic digital marketing formats, shoppable media is far from being saturated. According to Statista, livestream e-commerce sales in the U.S. might grow 500% from 2020 to 2024, to $35 billion annually.
In the longer term, with more widespread VR/AR adoption, even more, enhanced and immersive video and media marketing experiences may gain traction, like 360-degree videos and virtual shops in the metaverse.
This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.
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