Interactivity, shoppability, new formats make their way to CTV advertising in 2023

Streaming services and advertisers experimented with new ad formats on connected TV in 2023, injecting interactivity and shoppable components as platforms look to engage viewers and brands seek to better measure campaigns and push consumers further down the marketing funnel.

Advertising on CTV continued to gain favor this year, with GroupM forecasting CTV advertising to reach $25.9 billion by the end of 2023 globally, and grow to $33 billion by 2026.  As brands and marketers look to capitalize on CTV’s growing viewership and data capabilities while streamers look to monetize - new ad formats, interactivity and shoppability took center stage in 2023. Here’s a look back at some of the CTV ad developments and partnerships that surfaced over the past year.

Roku kicked off early 2023 with a partnership with DoorDash featuring click-to-order offers within Roku ads for merchants of the food delivery service. Wendy’s was one of the first restaurant partners to sign on, offering discounts with promotions through SMS text or email. Roku also integrated one-click shoppable ads from Shopify merchants and later partnered on interactive streaming ads for mobile app marketers with Unity. Roku, a platform that has 75.8 million active accounts, introduced capabilities like contextual advertising  powered by AI on The Roku Channel free ad-supported streaming TV (FAST) service and also leaned into opportunities from its branded smart TVs to explore new types of ad formats.

Ahead of New Fronts this year Roku’s Kristina Shepard noted that 40% of Gen Z audiences expect to interact with ad units. The ultimate goal for Roku in shoppable pilots, including an earlier one with Walmart, is “to remove the steps, remove the friction” so that eventually the purchase experience can be as easy as possible, Shepard told StreamTV Insider in April.

It comes as a study between the streamer and Magna Media found consumers were craving more entertaining commercials that offer value in return. Watch Along formats on Roku specifically bolstered top-of-mind ad recall for brands, while other formats helped lift purchase intent, per the study.

Other streamers, such as Warner Bros. Discovery took the opportunity in May to promote new ad formats across its content portfolio including ad-supported Max. Those included Pasue Ads, as well as interactive one-click reveal, which offers a message, promo or trivia answer. WBD Stream also teed up curated carousels for marketers to showcase multiple products and extendable ads where users can open a branded hub on the mobile or CTV device to further interact with an ad.

The new options for ad formats could play to consumer appetite, as a separate study from BrightLine found viewers desired increased interactivity in CTV ads and the vendor itself saw traction helping to incorporate new formats for several services in 2023. In December the interactive TV platform disclosed a new stat, reporting a 100% increase in the growth of interactive ads (ie: trivia, surveys, QR codes, and picture-in-picture) this holiday season versus last year.  Data shows November 2023 saw double the launches of advanced CTV ads as November 2022.  But despite twice as many launches of interactive ads, BrightLine noted that CTV budgets didn’t double, “indicating the ad industry is largely migrating towards advanced ad experiences instead of more traditional ad formats.”

Samsung in 2023 tapped BrightLine to power interactive CTV ads on its Samsung TV Plus FAST, following a similar move by Vizio last year. At the end of the year Dish also picked the vendor to support interactive formats on the Sling TV virtual MVPD.

One of the major benefits the partners cited is the ability for advertisers to gauge whether their TV campaigns are driving incremental results, alongside interactive ad units that prompt viewer action and enable more measurable results on aspects like brand awareness and purchase intent.

“Our first-party subscriber data coupled with Brightline’s suite of personalized ad experiences is another opportunity for our brand partners to achieve better attribution and guide consumers further down the marketing funnel,” said Dave Antonelli, vice president of Sales at Dish Media, in a statement. In announcing the partnership, BrightLine cited recent internal research that found dynamic CTV ad inventory delivered a 126% purchase attribution rate and a 3.5% lift in purchase intent. BrightLine itself introduced a new suite of interactive ad formats, including “advergaming.”

Other vendors such as PadSquad worked to incorporate interactivity into CTV ad formats, while Amagi partnered with Mirriad AI for virtual product placement. AI-powered product identification tech from vendor KERV helped support interactive shoppable experiences for NBCUniversal’s Peacock, announced earlier this year alongside new ad formats. And this fall NBCU’s Peacock brought capabilities for viewers to “shop the look” of select episodes of Bravo’s Below Deck, in a shoppable ad partnership with Walmart.

“That Walmart is the retail partner for both Roku and NBCU is telling,” wrote Douglas Montgomery, senior analyst at Aluma Insights in a February column detailing opportunity for shoppable TV. “Amazon’s Prime Video competes with Peacock in SVOD and its Fire TV hardware competes with Roku, making Walmart an attractive choice for nationwide fulfillment.”

Amazon too explored shoppable TV, and earlier this year introed “Shop the look” features via QR codes through the X-Ray feature of Prime Video – further helping to close the purchase loop for marketers and monetize video content.

“Amazon has very quietly created a seamless shopping experience, one that is likely to significantly shake up the way TV is monetized in years to come,” wrote TREV analyst Alan Wolk in a September column.

And Peacock during NewFronts highlighted new formats including Marquee formats for live sports, originally used on linear and now ported to streaming.

“It puts your brand at the center of excitement on the field or pitch,” said Peter Blacker, NBCU’s EVP of streaming & data products and global advertising and partnerships. “So when someone scores, your brand scores too.” He noted on linear, brands running Marquee ads benefit from a 57% lift in brand awareness.

Separately, AI played a role in interactivity and ad buying as KERV teamed up with AI Digital to pair AI tech for interactive, programmatic ads on CTV.

Leveraging AI was another theme for Amazon which incorporated AI into ad offerings as well, in October announcing a self-service platform that lets small and medium businesses run ads on its variety of ad-supported video platforms. It offered AI capabilities tied with propriety software to help brands create their own ads – with the promise of interactive and shoppable capabilities.

“Making for a very tight retail media loop that makes those ads as easy to measure as digital, only with the emotional impact that comes from the sight, sound and motion available on television,” wrote TVREV’s Wolk in an October column unpacking the move. “That’s not a given though—much will depend on how clearly AI-generated the ads seem—but if Amazon can make it work for most brands, we can expect to see others entering into this space too, as not every brand is going to want to exist in the Amazon bubble.”

The biggest streamers in 2023 sought ways to pump up their ad capabilities, including Netflix which is looking to attract both users and advertisers to its roughly one-year old SVOD plan with ads. On the one-year anniversary Netflix disclosed its plan with ads had reached 15 million users and announced it would introduce capabilities for new formats, including “binge ads” and sponsorships. Amazon Fire TV for its part introduced new capabilities for advertisers including home screen placements and contextual opportunities. American Airlines, for example, partnered for a feature rotator spot that automatically plays a video when a customer engages with the placement on Fire TV’s on-device ads.

“It’s basically like getting your video commercial in front of the Fire TV user the minute they turn on the TV, no matter what they go on to watch,” Fire TV’s Charlotte Maines told StreamTV insider in November.

Google’s YouTube, meanwhile, announce CTV-first formats in 2023, including non--skippable ads, Pause experience, and earlier shoppable ads on CTV that sends info to viewers’ phone that use a second screen while watching TV – a behavior it says over 80% of viewers perform– to engage with ads.  

In a November column Parks Associates’ Eric Sorensen, director of Streaming Video Tracker, zeroed in on the growth of ad-supported streaming and evolution of formats.

“Innovative ad formats, such as unskippable, paused ads and T-commerce, are helping to boost engagement and drive sales. The proliferation of ad-supported services provides advertisers with more options for ad placement and a wider reach, while advances in data mining and analytics make it possible to run highly targeted and interactive advertising campaigns,” wrote Sorensen. “The success of an AVOD, SAVOD, or FAST service is dependent on engaging relevant ads for the viewer which in turn drives ad revenue. If services do not leverage interactive advertising experiences, they are at risk of consumers churning out.”