NBCUniversal rolls out shoppable ad unit

Brief:

Comcast's NBCUniversal is rolling out ads that lets viewers use their smartphones to buy products featured in shows they are watching. By pointing their smartphones at scannable QR codes that pop up to indicate when a product is available for sale, viewers can see an e-commerce site to place an order, TechCrunch reported.
NBCUniversal will introduce Shoppable TV during unscripted programming, including "Sunday Night Football." During testing, the ads generated conversions that were 30% greater than e-commerce benchmarks and growth rates that were 10% better than for social media, NBCUniversal said.
NBCUniversal had tested the ad format with Lacoste during the French Open, Walmart on NBC's "Today" show, musical instrument maker Roli on NBC's "Songland" series and indoor cycling startup Zwift during the Tour de France. Show announcers occasionally mention the pop-up ads to drive greater response, TechCrunch reported.

Insight:

NBCUniversal's rollout of shoppable ads is the best indication yet that its earlier tests of the interactive format performed well. Direct-response TV spots, infomercials and shopping channels have been around for years, but NBCUniversal aims to provide a more integrated approach for direct-to-consumer (DTC) sales through a smartphone. Because the shopping moments will appear in commercials and during shows on the network, brands can reach consumers with a call-to-action when they're most engaged. By making the service compatible with smartphones, NBUniversal can potentially provide a less intrusive "second-screening" experience that doesn't require viewers to have other specialized gear like an interactive set-top box or connected TV.

"NBCUniveral is making clear the opportunity for real financial impact they see from OTT in their move to test out ad units that let users buy from their phones," Price Glomski, EVP of emerging commerce at PMG, said in a statement shared with Mobile Marketer. "We’ve already seen the effect of this type of seamless shift from watching to buying on omnichannel platforms like Google and Amazon."

The direct-response mechanism can help marketers immediately see how well their ads are performing based on the number of website visits and sales, even if the response rates end up being a fraction of the total viewing audience. A 1% response rate is common for email, social media and paid search campaigns, while online display ads generate a 0.3% response rate on average, per the ANA/DMA 2018 Response Rate Report.

For broadcasters like NBUNiversal that face growing competition from ad-free over-the-top (OTT) services like Netflix, Apple TV+ and Disney+, e-commerce can be an incremental source of revenue. TV ad spending will continue to suffer from declining ratings in key markets, falling to $180 billion worldwide by 2021 from $182 billion this year, Publicis-owned media agency Zenith forecast this month.