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Will 2020 See a Breakout for Shoppable TV?

ONTARIO—This year could be the break-out year for “shoppable TV,” which allows viewers to immediately purchase products seen on their favorite TV programs, right in the comfort of their living rooms.

The proof: Shoppable advertising platform TheTake announced a deal with LG Electronics at CES 2020 to integrate TheTake’s AI-enabled shoppable video software directly into LG’s 2020 smart TVs. Meanwhile, NBCUniversal is ramping up “Shoppable TV,” its own shoppable ad platform, which the company has been trialing on various programs since May 2019.

The old joke about being able to point and click to purchase Jennifer Aniston’s sweater on “Friends” illustrates just how long the concept has been in play. But technology has come a long way since then.

“Advertisers have been looking for ways to make their ad placements interactive for quite some time.” said Mark Hudson, TVSquared's head of Business Intelligence. (TVSquared helps advertisers assess the performance of their linear and digital TV buys.) “Today, the timing might be right, as the evolution and fragmentation of TV has been driven by the viewers themselves wanting to have more control over when, where and how they watch content.”

The hunger to buy products seen on TV seems to be growing. According to Parks Associates, 26% of U.S. broadband households see purchasing products seen on TV ads to be “appealing or very appealing.”

BROADCASTER-AGNOSTIC

The shoppable ad platform announced by TheTake and LG last month is broadcaster-agnostic. In fact, beyond selling TheTake the rights to correlate products shown on TV with manufacturers wanting to sell them online, broadcasters have little else to do with this shoppable ad platform. TheTake does the heavy lifting.

“Our retail database contains over 200 million products, supported by thousands of retailers,” said Ty Cooper, TheTake’s co-founder and CEO. “We tag products as they appear in TV programs and present buying windows to viewers when these products turn up onscreen. Using their LG remote, the viewer just clicks on the buying option and the order is directed to the retailer’s website where the order is completed. Meanwhile, we charge the retailers per click and/or take a percentage of the sale in compensation for our work.”

LG smart TV users will be able to buy TheTake-enabled shoppable products with the click of their remote. So will customers of one yet unnamed U.S. MVPD who is integrating TheTake’s shoppable ad platform into their set-top boxes in 2020.

Meanwhile, TheTake has been busy striking broadcaster-specific shoppable TV deals with WarnerMedia, A+E Networks, Crown Media Family Networks and NBCUniversal.

“Our work with TheTake is really the first time we will be able to make shoppable experiences on our linear networks seamless, with the first rollout on LG televisions this year,” said

Larry Allen, WarnerMedia Ad Sales’ vice president of ad product strategy. “Their AI technology, which helps identify what’s on-screen and ties it to an ecommerce opportunity, is unique and, more importantly, scalable. We’re excited to see how consumers embrace this format this year.”

NBCUNIVERSAL PUSHES AHEAD

In contrast to TheTake’s shoppable ad platform, NBCUniversal’s ShoppableTV is broadcaster-centric. In fact, the system won’t work without the broadcaster’s active participation.

“During NBCUniversal programming, viewers are alerted to an upcoming, on-air shoppable moment,” said Josh Feldman, executive vice president/head of marketing and advertising creative for NBCUniversal. “An NBCU code appears on the lower third of the screen, and viewers simply point their smartphone at the television, scan the code and are taken directly to the brand's site to complete their purchase.”

NBCUniversal makes its money by taking a percentage of the sale; the percentage varying from client to client depending on whatever deal has been struck.

NBCUniversal started rolling out ShoppableTV in test trials in May 2019; extending the technology to “our full portfolio in October of 2019, adding lifestyle brands for the first time,” said Feldman. “Since our launch in May, we have executed several ShoppableTV experiences across a variety of networks and formats. For example, during the French Open, we partnered with Lacoste to drive viewers to shop immediately on the brand's website. Since then, we've also activated with Walmart in partnership with ‘The Today Show;’ Roli during NBC's ‘Songland;’ Zwift for the Tour de France and most recently with dpHUE during E!'s ‘Very Cavallari’ holiday special.”

HOW WILL IT IMPACT CONVENTIONAL ADS?

The ability of shoppable ads to generate revenues from programming, rather than commercial spots, is good news for broadcasters in a PVR-driven ad-skipping age. But given that advertising dollars are limited, the question has to be asked: Will shoppable ads cannibalize conventional TV advertising sales?

Josh Feldman doesn’t think so. “There is no conflict with the rest of our advertising business,” he said. “What is nice about ShoppableTV is that it opens the door to many brands that are not traditional national TV advertisers to sell their products directly to our valuable audiences across all of NBCU.” He added that “commercial innovation ads” like ShoppableTV test well with TV viewers, with 92% preferring them to standard ads.”

WarnerMedia’s Larry Allen shares Feldman’s confidence. “I think the media industry overall is trying to move away from just measuring the value of advertising through the lens of exposure and layering in insights about how advertising actually drove consumers to take action,” said Allen. “Shoppable ads are another part of that shift and is another tool for our ad sales organization to engage with clients in thinking about how their investments work harder within our premium content, not only in a traditional 30-second commercial.”

Meanwhile, TVSquared’s Mark Hudson says the real threat to conventional TV ads is not shoppable ads, but the imprecise targeting of 30-second TV spots to people who want to buy these products.

“The key to making the ads themselves successful is using data to determine who will be most likely to respond to that sort of ad,” he said. “That’s a question of skilled targeting and data understanding, rather than the ‘wow’ factor of an ad.”