Television advertising has evolved from a one-way broadcast into a dynamic, two-way conversation. The latest development in this shift is shoppable TV, which turns passive viewing into an active shopping experience. This technology allows brands to connect with audiences and drive sales directly from the living room screen.

These new interactive ad formats represent a significant opportunity for advertisers to shorten the path to purchase. To capitalize on this conversion-focused medium, advertisers must adapt their audience targeting strategies. Keep reading to learn more about preparing your strategy for the future of television.

What is Shoppable TV and Why Does it Matter Now?

Before diving into specific targeting strategies, it is important to have a foundational understanding of what shoppable TV is and how it functions. This context explains why shoppable TV is a critical topic for advertisers today.

Defining the New Frontier: From Linear TV to T-Commerce

Shoppable TV transforms traditional video ads into interactive, transactional experiences. Unlike linear TV, where ads are simply watched, shoppable formats on Connected TV (CTV) allow viewers to engage directly with products. This evolution has given rise to “t-commerce,” or television commerce, which refers to the sale of goods directly through TV screens. In 2024, US shoppable video sales are estimated to reach $16.88 billion.

Through interactive CTV ads, viewers can use their remote or smartphone to browse product catalogs, scan a QR code for more information, or even complete a purchase. This technology creates a seamless transactional layer over their entertainment, turning a moment of inspiration into an immediate sale without disrupting the viewing experience.

The Key Benefits for Advertisers and Consumers

Shoppable advertising offers powerful advantages for both brands and viewers. For advertisers, it dramatically shortens the sales funnel by closing the gap between seeing an ad and making a purchase. Interactive CTV ads generate engagement rates nearly 10 times higher than standard video, boosting performance and providing clearer attribution. This direct line to conversion can lead to a significant increase in return on ad spend (ROAS).

For consumers, the primary benefit is convenience. The experience is seamless, allowing them to act on an impulse to buy or learn more without having to search for the product later. Forty percent of over-the-top (OTT) users have reported pausing content to purchase or learn more about an advertised product. This makes the shopping journey smoother and presents viewers with personalized offers relevant to their interests.

The Technology Powering Interactive Advertising on CTV

The rise of shoppable TV is made possible by specific technological advancements within the Connected TV ecosystem. These innovations are what enable advertisers to create interactive and transactional ad experiences for viewers at home.

QR Codes: The Bridge Between the First and Second Screen

QR codes are one of the most common and accessible forms of shoppable TV technology. They serve as a simple bridge between the television and a viewer’s personal smartphone. When a QR code appears in an ad, the viewer can scan it to instantly open a product page, a special offer, or a brand’s website on their mobile device.

This interaction seamlessly connects the top-of-funnel awareness generated on the big screen with the lower-funnel action taken on the second screen. With nearly 95% of consumers understanding how to scan QR codes, this method is an effective way to drive measurable engagement and direct response from a CTV campaign.

Native In-Platform Purchasing and Overlays

More advanced shoppable technologies are creating even more integrated experiences. Interactive overlays allow viewers to use their TV remote to browse product carousels, choose different options, or add items to a cart directly on the screen. This functionality keeps the entire shopping journey within the TV environment, reducing friction for the consumer.

Major streaming platforms are developing their own proprietary formats to facilitate these on-screen transactions. For instance, Amazon reported that its interactive video ads with clickable overlays garner nearly 20 times more interactions than ads with QR codes. Similarly, Walmart found that campaigns using Roku’s shoppable ad format achieved click-through rates three times higher than average video campaigns.

The Role of Data in Fueling Shoppable Experiences

Data is the engine that drives effective shoppable advertising. CTV platforms provide access to rich, first-party data sets that include household demographics, viewing habits, and content preferences. This information allows for the precise delivery of relevant ads to interested audiences.

By leveraging this data, advertisers can move beyond the broad targeting of traditional television and deliver personalized shoppable ads that are more likely to resonate. This data-driven approach ensures that interactive ads reach the right viewers at the right time, increasing the probability of engagement and conversion. This wealth of data not only powers the ad experience itself but also requires a fundamental shift in how advertisers think about reaching their audiences.

Rethinking Your Audience Targeting for a Shoppable Future

Effectively leveraging shoppable formats requires advertisers and media buyers to evolve their approach to audience targeting. To succeed with interactive advertising, it is necessary to adopt advanced strategies that go beyond traditional methods.

Moving Beyond Demographics: Leveraging First-Party and Third-Party Data

Success in the shoppable TV landscape requires moving past broad demographic targeting like age and gender. The ability to integrate a brand’s own first-party data, such as customer purchase history, with household-level data from CTV platforms is a primary driver of this shift. This data fusion creates highly specific audience segments, and its superior accuracy is why advanced targeting capabilities are the main reason marketers are reallocating budgets from linear TV to CTV.

Using this combined data, advertisers can target existing customers with ads for new products or build lookalike audiences based on their most profitable buyers. This level of precision is why first-party data typically delivers the highest return on investment for CTV advertising.

Behavioral and Contextual Targeting in an Interactive Environment

Behavioral and contextual targeting are also highly effective for shoppable campaigns. Behavioral targeting allows advertisers to reach audiences based on their viewing habits. For example, a kitchen appliance brand could serve an interactive ad to viewers who frequently watch cooking shows, increasing the ad’s relevance.

Contextual targeting involves placing a shoppable ad within thematically appropriate programming. An ad for athletic wear shown during a live sporting event is more likely to capture the viewer’s attention and prompt an interaction. Since nearly half of surveyed Target guests (49%) report being likely to search for an item after seeing it on TV, placing ads in the right context can significantly improve performance.

Retargeting Strategies for the Living Room

Retargeting is a powerful strategy that can be adapted for the CTV environment. Brands can re-engage website visitors or users who abandoned a shopping cart by serving them a shoppable ad on their television. This approach brings the brand back to the forefront and provides a simple, direct path to completing the purchase.

This strategy also applies to viewers who interacted with a shoppable ad but did not convert. By retargeting these high-intent individuals, advertisers can create multiple touchpoints across different devices. This guides them further down the conversion funnel and reminds them of the product they showed interest in.

Preparing Your Brand for the Interactive Ad Revolution

A successful shoppable TV campaign involves more than just advanced targeting. It also requires careful preparation in creative development, measurement, and overall funnel strategy. The following are practical steps brands should take to get ready for this new advertising format.

Creative Best Practices for Shoppable Ads

Ad creative designed for interaction requires a specific approach. The call-to-action (CTA) must be clear, compelling, and easy to follow. Visual elements should highlight the interactive component, such as a prominent QR code or a button that says “Add to Cart.” The creative must be built from the ground up with interaction in mind, not simply adapted from a standard video ad.

The offer itself should be simple and provide clear value to the viewer. When executed well, interactive elements like product galleries can earn an additional 71 seconds of engagement time on average compared to standard ads. Keeping the user experience straightforward and rewarding is key to encouraging participation.

Measuring Success: New KPIs for a New Ad Format

The metrics for success with shoppable TV go far beyond traditional measures like impressions and reach. Since these formats are designed to drive action, it is important to track key performance indicators (KPIs) that reflect engagement and conversion. Over half of smart TV viewers remember seeing a shoppable ad, and 50% have interacted with one.

Relevant KPIs for interactive campaigns include engagement rate, scan rate for QR codes, click-through rate, and add-to-cart rate. Ultimately, the most important metrics are those tied directly to business outcomes, such as cost per acquisition (CPA) and direct return on ad spend (ROAS). These KPIs provide a clear picture of an ad’s performance and its impact on the bottom line.

Aligning Your Sales Funnel with the CTV Experience

The user experience after interacting with a shoppable ad is just as important as the ad itself. A seamless end-to-end journey is necessary to convert interest into a sale. If a viewer scans a QR code, they should be directed to a mobile-optimized landing page that loads quickly and is easy to navigate.

Any friction in the process can cause a potential customer to drop off. The checkout process, whether on a mobile device or the TV screen itself, must be simple and require minimal steps. Aligning your sales funnel with the CTV experience ensures you capitalize on the interest generated by your interactive ad.

Navigating the Challenges of Shoppable Advertising

While shoppable formats offer significant advantages, brands must also be prepared to navigate a few challenges. The CTV landscape is fragmented, with different streaming platforms and device manufacturers offering their own unique ad formats and capabilities. This can complicate campaign execution and require a tailored approach for each environment.

Additionally, measurement can be complex when trying to connect an interaction on a TV screen to a final purchase that may happen later on a different device. Creating effective interactive creative also requires a different approach and potentially a larger investment than standard video ads. Overcoming these hurdles is key to unlocking the full potential of shoppable TV.

Maximize Your ROI with a Forward-Thinking CTV Strategy

Shoppable TV is transforming the advertising landscape by closing the gap between brand awareness and direct sales. Its success hinges on moving beyond traditional tactics and embracing sophisticated, data-driven targeting strategies tailored for this new interactive environment. By combining the right technology with smart audience segmentation, brands can turn CTV into a powerful performance marketing channel.

Navigating the world of CTV advertising to implement these strategies can be complex. To maximize performance, brands need access to premium inventory on the platforms where high-value audiences are watching.

Our team specializes in securing this top-tier CTV inventory at a fraction of the cost through remnant advertising. We help your brand test and scale high-performance shoppable campaigns without overspending, ensuring you achieve the highest possible return on your investment. Contact us today to develop a forward-thinking CTV strategy that leverages the power of interactive ads.