3 Trends Retailers Can Expect From the Rise of CTV  

As connected TV (CTV) ad inventory has increased, it has unleashed a wave of opportunities and challenges for retailers, blending the traditional television viewing experience with the precision and data-driven capabilities of digital advertising. Three transformative trends are emerging as retailers navigate this dynamic landscape, heralding a new era of retail advertising.

Performance-Centric, Full-Funnel Differentiation

In the world of advertising, visibility is no longer enough. Advertisers want to see measurable outcomes and a tangible return on their investment. Success in advertising is now measured by performance — however the advertiser defines it. As inventory supply for CTV continues to grow, retailers advertising on these platforms can expect to see a shift towards differentiation not only in content and audience targeting, but also in terms of performance and outcomes.

Performance doesn't only refer to lower funnel opportunities; it also includes measurably driving awareness and consideration. Retailers can use their first-party data to improve targeting and measurement of CTV ads by implementing comprehensive marketing strategies that cover the entire sales funnel. This will enable retailers to make the most of their first-party data and enhance the targeting and measurement of CTV ads. This trend will be particularly pronounced for retailers that are sitting on some of the most valuable first-party data in the ecosystem.

This focus on performance will drive retailers to fine-tune CTV strategies by optimizing ad creative, targeting parameters and placement decisions based on real-time data analytics. Those that can deliver more meaningful results in terms of ROI will stand out in the evolving CTV landscape.

Increased Competition Equals Increased Innovation

As competition grows increasingly fierce, streaming platforms will face mounting pressure to deliver meaningful results for advertisers, which will ultimately drive innovation in the CTV space. Streamers will explore new formats, ad targeting options, and measurement methodologies to meet the demands of retail advertisers that comprise substantial revenue opportunities.

The platforms themselves have responded by offering tools like A/B testing, conversion tracking, and audience analytics to provide advertisers with insights into the effectiveness of campaigns. Retailers can now assess which ads drive conversions to preferred audiences and tailor their efficiency strategies accordingly.

For example, shoppable video ads empower consumers to engage and take action, facilitating the transition from consideration on CTV to making a purchase. With new tools in tow, retailers can not only navigate the full marketing funnel, but also better move customers from the initial stages of awareness to the ultimate goal of completing the buying journey, all while achieving measurable results.

Creating Accessible Advertising for More Advertisers

Imagine a family-owned outdoor gear store specializing in high-quality camping and hiking equipment, but its limited marketing budget has always prevented it from considering traditional TV advertising. Increased CTV inventory means this mom-and-pop shop has the opportunity to connect with its target audience more effectively. The retailer can use CTV's data-driven targeting capabilities to identify potential customers based on their interests in outdoor activities, camping and hiking, as well as their geographic location.

By harnessing the data-driven targeting capabilities of CTV, niche businesses and smaller retailers can reach audiences with greater precision than ever before, helping them compete with industry giants. This trend empowers retailers of all sizes to break into untapped markets and demographics, transforming them into media companies themselves. With the help of machine learning algorithms and programmatic CTV buying, retail media is now able to offer highly targeted advertising opportunities that serve relevant ads to the right viewers at the right time.

As the CTV ecosystem continues to evolve, retailers are uniquely positioned to leverage the opportunity for full-funnel performance marketing with their treasure trove of data; to ensure high ROI; and produce measurable, personalized and unique ads on CTV. The future of retail advertising is here, and it's powered by CTV.

Nikhil Raj is vice president of retail media at Moloco, a company that provides machine learning-based advertising solutions to drive growth for businesses of all sizes.