Report Defines ‘Commerce Video’ and Unveils Solutions for Ideal Commerce Video Ad Strategies

In a landmark study, “Unconnected Commerce: the Disconnect between Brands and Consumers in Digital Video Shopping,” the Interactive Advertising Bureau (IAB) analyzes the rise of Commerce Video, as it found 70% of digital video advertisers are already using Commerce Video and nearly all of them plan to spend more in the future.

The study, conducted in partnership with research consultancy Alter Agents, aims to both define Commerce Video and highlight the growing importance of this ad format in a climate where the purchasing funnel is radically changing as consumers condense product discovery and purchasing into one seamless experience.

“As the purchase journey collapses, digital video is no longer just an awareness and consideration tool, it is now a critical strategy in driving business outcomes like sales, store/site visits, leads, downloads, etc.,” said David Cohen, CEO, IAB. “This report found that while brands are embracing Commerce Video, there is room to improve the experience based on consumer needs and preferences. Commerce Video works – this study reveals how to unlock its full potential.”

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Defining Commerce Video
With digital video––Connected TV (CTV), Social Video, and Online Video (OLV)––dominating consumers’ digital media consumption, brands are capitalizing on Commerce Video as a powerful way to engage with them at scale. The term Commerce Video is not part of consumers’ or advertisers’ vernacular, yet it is surging amongst both groups.

In fact, nearly all (95%) Commerce Video advertisers use these ads more often now than other media to drive purchases. Additionally, three-quarters of consumers feel that the ads are more relevant to their purchase process than other ad types, and that Commerce Video helps them make better purchasing decisions overall.

According to IAB, Commerce Video refers to digital video ads that are designed to drive action from an intended audience. These videos include a clear call-to-action that drives the consumer into the purchasing journey, either generating leads or acquiring new customers. Examples of qualifying calls-to-action include “follow,” “sign up,” “shop now,” and “purchase.”

“Nearly every advertiser we surveyed plans to increase their spend on Commerce Video in 2025, so it’s critical that we, as an industry, have a unified definition for what this medium does and how it should be used,” added Chris Bruderle, Vice President, Industry Insights & Content Strategy, IAB. “While extremely effective, if used incorrectly, Commerce Media can be detrimental to brand loyalty and ultimately sales. Plainly said, Commerce Video is not a blunt instrument. There are nuances that brands need to take into consideration.”

Misalignment on Commerce Video between Consumers and Advertisers
While brands integrate Commerce Video into their media strategies to drive engagement and purchase outcomes, there is often a misalignment between how consumers prefer to shop using video and how advertisers create and deliver these ads.

According to the study, advertisers are overconfident when it comes to deploying Commerce Video campaigns. Nearly all advertisers (96%) feel their messaging strategies are effective at driving purchases. However, 7-in-10 consumers report feeling annoyed or negative monthly or more often with Commerce Video ads, and one-third at least weekly. In fact, these poor experiences can lead to negative consumer reactions such as social media backlash, switching to competitors, and unsubscribing from services, resulting in lost sales.

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The alignment between the consumer experience and Commerce Video campaign activation is paramount. Advertisers have an opportunity to better align on these strategies, including refining their messaging, campaign timing, delivery throughout the purchasing journey, and more:

“While many marketers believe their Commerce Video ad strategies are effective, consumer sentiment would indicate that there is significant room for improvement. There is a delicate balance that advertisers must walk when it comes to campaign targeting, timing, and delivery to achieve optimal outcomes. If advertisers adjust their go-to-market approach as the study indicates, the future is bright for Commerce Video,” Cohen concluded.