Commerce video drives retail growth

The news: 70% of digital video advertisers are deploying Commerce Video ads as consumers combine product discovery and purchasing into a more seamless experience, with nearly all planning to increase spending on the format, according to the Interactive Advertising Bureau (IAB).

• These digital video ads prompt specific actions like “purchase” or “shop now.” With clear calls to action, these videos help guide consumers directly into the purchase journey.
• Commerce video is a growing force in digital advertising, with 75% of consumers finding it aligns with their buying process, and 95% of advertisers using it more often to drive sales.

Yes, but: Despite the format’s growing popularity, there is a misalignment between how brands deploy Commerce Video and how consumers engage with it.

• While 96% of advertisers feel their Commerce Video efforts are effective, 70% of consumers report feeling annoyed by these ads on a monthly basis or more.
• 71% of consumers find Commerce Video ads more repetitive than other ad types. Advertisers must rethink how often they serve these ads, as excessive repetition can harm brand perception.
• Consumers prefer longer Commerce Video ads, ideally from 30 to 60 seconds, to allow time to absorb product information and make informed decisions. However, most advertisers favor shorter videos, typically under 15 seconds—exposing a gap between consumer preferences and ad deployment.

A full-funnel opportunity: Advertisers primarily view Commerce Video as a lower-funnel tactic, focusing on driving direct conversions. However, 64% of consumers find these ads helpful during the brand discovery phase, suggesting an opportunity for advertisers to engage users earlier in the purchasing journey.

• When they are ready to purchase, though, shoppers expect Commerce Video ads to feature clear product demonstrations, pricing details, and promotions. In fact, 83% of consumers agree that such ads help them finalize purchasing decisions.
• Just 40% of advertisers incorporate creator-generated content into their Commerce Video campaigns. Consumers, however, cite creator videos as one of the most impactful factors in their shopping decisions, highlighting yet another opportunity.

Our take: US digital video ad spending will grow 20.8% this year to $108.15 billion; while expansion will slow over the next few years, it will reach $176.67 billion by 2028, per our forecast. Commerce video is poised to play a notable role as brands increasingly turn to this format to capitalize on the rapid shift toward digital shopping.