It’s the longstanding dream of every marketing executive: Imagine that consumers could just click on what you’re selling in a video ad and buy it right then and there?
Despite any clear success until now, the concept has been so compelling that investors have been lining up to put money behind so-called shoppable video. In early June, for instance, Joyus, a QVC-like startup that produces videos designed to get users to click and buy, received $24 million in funding from Disney’s Steamboat Ventures. So far, Joyus has received a total of $43.4 million in funding. Similarly, in July startup Fuisz Media raised $10 million, bringing its total to $12 million.
Some of the industry’s biggest players also are behind shoppable video. YouTube has been pushing the idea since 2012 and recently overhauled the technology to make it work well on mobile. Facebook also began testing shoppable videos via its Instagram unit. And Adobe (CMO.com’s parent company) recently unveiled a new shoppable video authoring and publishing tool within its Experience Manager Assets offering.
On the other hand, there’s Victor Solomon.
Solomon recently penned an op-ed for TechCrunch in which he announced he was “quitting” shoppable video. Solomon is the founder of Showroom, one of the top shoppable video-tech companies. In his piece, Solomon said the space is “riddled with insurmountable challenges.” The essay punctuated Solomon’s exit from the category, though he’s now providing Showroom’s code free to other entrepreneurs in the hopes of furthering mass adoption.
So the question comes down to this: Will shoppable eventually have its moment, or will it end up with location-based check-ins in the dustbin of once-promising technologies that never took off?
The Case For Shoppable Video
It’s easy to see why shoppable video is getting so much attention. Just look at the growth of video consumption. YouTube, which now has more than 1 billion users, claims that the number of hours per month that people are consuming is up 50% this year versus last.
A July report from eMarketer also found that consumers now spend one hour and 16 minutes, on average, watching online video per day. That’s up from 21 minutes in 2011. The growth is especially concentrated among Millennials, a group coveted by marketers for their perceived malleability to brand influences. A survey by ad tech firm WeSee also found that 56% of U.K. consumers said they would use shoppable video to make purchases directly.
Sensing a growing acceptance for shoppable video, Google tweaked its shoppable video offering in May with TrueView for shopping, which lets advertisers show product details within a video and then lets consumers click through to make a purchase.
“In the past, other shoppable video functionality has been very much focused on custom experiences that typically only worked on desktop,” said Avi Fein, product manager at YouTube. “We wanted to make something that could scale easily across YouTube to work on all screens.”
Adobe product marketing manager Vebeka Guess also pointed to the need for shoppable video--traditionally too expensive to produce--to work across devices.
“When we talked to our customers, a lot of times what they said is, ‘Yeah, we’ve experimented with shoppable videos, and we worked with these production agencies, and they created these custom video players for us,’” she said, but such custom players often didn’t work well on multiple screens.
The embrace of shoppable video would mark the culmination of nearly two decades of efforts. Since the ’90s, the TV industry has been trying to achieve the same. The longstanding vision is frequently summed up in three anachronistic words: “Jennifer Aniston’s sweater.” The idea was that if a viewer liked Rachel’s sweater on “Friends,” she could hit a button on the remote and have the item shipped to her house.
Despite the industry’s best attempts, the idea never took off. Some see online video as a better fit--especially on a mobile device, where the consumer is just a swipe away from making a purchase.
Back in 2005, Nordstrom tested the waters with shoppable video remakes of Culture Club’s “I’ll Tumble 4 Ya” and the Go-Go’s “Our Lips Our Sealed.” A wave of startups appeared in 2008 and 2009 in the category as well, Solomon told CMO.com.
Early this decade, the concept seemed to gain momentum as YouTube put its support behind shoppable video and Target released an ambitious 12-minute shoppable video called “Falling for You.” Brands including Tresemme, Juicy Couture, and MAC Cosmetics have also experimented with shoppable video.
So far, we haven’t seen any breakout hits. However, Joyus claims it drives an average 99 cents of direct commerce revenue per view. Adam Sarner, research VP at Gartner, cited recent research from NPD Group showing nearly 20% of consumers have used their second-screen devices to shop for products they saw advertised on TV.
“Shoppable video, in my opinion, still has potential as direct-response, multimedia content marketing,” he told CMO.com. “But its execution, distribution, and optimization is what will make it work for one brand and fail for another.”
The Case Against Shoppable Video
Shoppable video hasn’t caught on for a reason, according to Maureen Mullen, co-founder and head of research at retail consultancy L2: It’s a lackluster experience. “It’s a little bit gimmicky,” she told CMO.com. ”If you’re watching a great piece of branded entertainment, do you really want to know what Taylor Swift is wearing?”
Joe McCaffrey, planning director and head of social at Huge, said he has known a lot of people in the fashion industry who have experimented with shoppable video. “They all kind of say the same thing,” he said. “It’s definitely a legitimate sales channel; however, the level of impact isn’t quite there yet.”
The problem, McCaffrey said, is that consumers aren’t yet trained to click on videos to make purchases. “If you think about when and why someone is watching video, are they in a shopping mind-set? Maybe not necessarily,” he said. “Maybe they’re looking for some inspiration or entertainment or looking to kill some time, but not ready to make a purchase yet.”
Adobe’s Guess disagreed, pointing out that consumers watched 100 million hours of how-to videos last year and that one-third of Millennials have made a purchase based on watching a video. “People are watching videos mainly to learn,” she said.
Problems Of Execution
Solomon agreed that it will take a while for consumers to get in the habit of shopping via video. Other problems are hindering adoption as well, including the length of time it takes big brands to produce videos. By the time a shoppable video is done, the product being advertised is often out of date, Solomon said.
L2’s Mullen pointed to another structural problem. “The challenge we see within organizations is the content creators on the market side and the ecommerce folks are separate, so the great content-rich assets from the content team are so far removed from those natural conversion funnels that it’s a huge disappointment to the brand experience,” she said.
If marketers do a better job of putting such content in front of users when they’re in buying mode, then they might be able to raise conversion rates on ecommerce sites, Mullen added. Typically, those hover in the 3% range. “If you flip that on its head, 96% or 97% of site visitors is a potential opportunity to push someone further down the funnel,” she said.
That’s certainly the argument shoppable video technology vendors are making. With Black Friday a mere two months away, Google’s Fein pointed out that unboxing videos and “haul” videos, in which shoppers show off their latest purchases, are ideal vehicles for in-video shopping.
“Advertisers can reach people while they’re watching these videos and are already in the shopping mind-set,” he said.