Marketing
22 September 2022
As streaming rises, CTV advertising gains CPG traction
CTV devices accounted for 52% of all CPG video ad impressions over the last year, Innovid found.

Photo by Glenn Carstens-Peters on Unsplash
CTV devices accounted for 52% of all CPG video ad impressions over the last year, Innovid found.
As more eyeballs move to streaming services, ad spend from brands is following.
Connected TV (CTV), which describes internet-enabled TV content delivery such as streaming, was the venue for 52% of all video ad impressions over the last year, according to a new report from advertising platform Innovid.
That was up from 44% previously, and overtook both mobile (37%) and desktop (11%), the report states.
It’s a sign of the paradigm shift in how Americans consume entertainment.
On the content side, digital platforms are making massive libraries of television shows and movies available over the internet, and streaming them through devices like smart TVs and streaming sticks. This has led to a proliferation of cord-cutting, as cable companies watch more viewers cut back or end subscriptions as they opt to watch all of their favorite shows and discover new films on streaming services.
They have many of those services to choose from. After Netflix wrung runaway business success out of a bold pivot from DVD shipments to streaming in 2007, it was joined by Amazon Prime Video and Hulu as part of a new wave of tech companies that brought on-demand into the national vocabulary, and made devices like Roku and the Amazon Fire Stick just as familiar to household electronics a cable box. These services all not only offered libraries of content from existing studios, but invested in their own productions. By 2019, more major media names ended up joining the fray by adding a plus. Disney+ and AppleTV+ launched that year, while HBO Max, NBCUniversal’s Peacock and Discovery+ switched on over the two subsequent years.
The new and existing entrants alike were in position to capitalize on massive growth of streaming during the worst of the pandemic, when many Americans were staying home with plenty of time to watch content, and directing the money that they would’ve spent on in-person entertainment toward subscriptions to multiple streaming services. Globally, streaming service subscriptions passed 1 billion for the first time in 2020, growing 26% over 2019, according to the Motion Picture Association. In 2021, US online video subscription revenue increased 24%, and surpassed satellite, while cable maintained its frontrunner position but saw revenue decrease 3%.
To be sure, the pendulum swung back after pandemic restrictions started to lift in 2022. The return of in-person options for dining and entertainment combined with the increased competition moderated growth of these services individually. Netflix lost one million subscribers in the second quarter and had to make layoffs. On the other hand, Disney added 14.4 million across its services in the same time period. In the long-term, industry leaders see streaming only continuing to grow. At the Code conference earlier this month, former Disney CEO Bob Iger said linear TV and satellite are in for a “world of hurt” as streamers rise, saying, “I can’t tell you when, but it goes away.”
While ads are an entrenched part of the viewing experience on linear TV, they didn’t arrive right away on streaming. From its perch as a leader, Netflix famously took the stance of remaining ad-free, setting the tone for a different kind of viewing experience. However, Hulu incorporated an ad-supported tier, demonstrating that there was a way to show ads while still giving consumers the choice to opt out.
In the pandemic, the CTV ad market grew right alongside streaming as a whole. According to eMarketer, upfront CTV ad spending grew 34% in 2021, and the firm forecasts it will repeat that growth in 2022 to reach $6.4 billion.
Smart TVs are driving CTV growth. (Photo by Nicolas J Leclercq on Unsplash)
In many ways, the growth is logical. After all, more people viewing an ever-growing variety of streaming content brings many opportunities to reach people, so it’s natural that brands would want to add another advertising channel, especially one that has similar benefits to TV and isn’t as dominated by entrenched players and rate structures. Many brands and agencies are especially willing to explore new avenues at a time when tried-and-true social media advertising playbooks have been challenged by Apple’s App Tracking Transparency rollout with last year’s update to iOS 14. On the consumer side, shopping for an item that appears in an ad is much easier when a person has easy access to a mobile device while sitting on her couch.
"Consumer behavior is changing at an unprecedented speed, and the rise in ecommerce has compelled CPG brands to reimagine their digital advertising strategy," said Stephanie Geno, CMO of Innovid, in a statement. "To meet consumers' evolving shopping habits and build brand loyalty, CPG brands have turned to CTV for its ability to reach consumers with personalized, cutting-edge advertising formats in a largely unsaturated space."
Context matters, so it makes sense that CTV ads are promoting products to people who are in their home. Innovid’s report found that CPG brands that made goods that are used around the house were the most active advertisers. The top consumer categories for CTV were as follows:
CTV also has some built-in advantages as an advertising format. It benefits both from the behavioral patterns of linear TV, and the data capabilities offered by the internet. Audiences will see ads as part of the experience of watching content, just like they always have. But with the internet connection applied, there’s the opportunity to use adtech tools to serve a message to a person that data shows is more likely to buy their product.
There are opportunities to make the content interactive, as well. Innovid found that over half (53%) of all CPG CTV advertisers ran some kind of advanced creative video, such as dynamic creatives and interactive content, such as an ad with a QR code. The report said that CPG brands using advanced dynamic creative optimization (DCO) formats, which is a form of advertising technology that uses data to guide and optimize creative elements and messages, saw a video completion rate of 98.6%, versus an average 93.9% completion rate for standard video.
"As the worlds of digital and linear television converge, CPG brands are realizing that CTV delivers the best of both worlds," Innovid’s Geno said. "It provides captivating sight, sound, and motion that engages audiences, along with the targetability, interactivity, and measurability that allows advertisers to increase the ROI of their campaigns. We believe that CPG brands will continue increasing their presence on CTV, as they are empowered with these experiences and tools that can reinforce brand loyalty and attract new customers–all from the comfort of their couch."
These platforms still have plenty of space to grow into. The report found that CPG campaigns reached 11.6% of Innovid's 95 million CTV households on average.
Along with growing reach, there could be more convergence between advertising, retailers and online shopping tools. CTV advertising remains in its earliest stages, as new opportunities and capabilities are being made available. Here’s a look at several recent announcements that point toward where it could be heading:
Amazon turned heads when it won the bidding for rights to broadcast the NFL’s Thursday Night Football to the tune of about $1 billion a year. With the first season of streaming TNF getting underway, it’s already clear that being a destination to watch America’s most popular sport brings all kinds of advantages for Prime. The Week 1 matchup drew an average of 13 million viewers to Prime Video, according to Nielsen, and Amazon reported a record number of Prime signups during a three-hour period as the broadcast was taking place, CNBC reported.
With the digitally native format, advertising opportunities during the streaming broadcast also abound. During a “PizzaPizzaPregame” sponsored by Little Caesars, viewers could scan a QR code to order pizza and earn perks. Mercedes-Benz also came aboard as an advertiser. A Business Insider report indicates Amazon is still on a “learning curve” when it comes to pricing. But as a whole, bringing TNF to streaming makes some of the most sought-after advertising space in broadcasting internet-enabled. This season, media pros won’t only be turning to the Super Bowl for the ads.
Against the backdrop of the subscription losses noted above, Netflix has announced plans to introduce advertising as part of a lower-cost subscription that is designed to expand access to the service. It has partnered with Microsoft to implement the advertising technology, and according to Variety, the tier may launch as early as November.
Early reports indicate that Netflix is looking to attract premium advertisers. According to the Wall Street Journal, Netflix is aiming to charge $65 CPM, or cost per thousand, which is much higher than other services. The move indicates Netflix may be aiming to strike a balance: It wants to offer value with a subscription, but wants to add advertisers that maintain its reputation as a high-end product, and, of course, add to revenue while doing so. At that rate, however, it seems less likely that it will be a place to find ads for up-and-coming brands, as other streamers have become.
A shoppable streaming ad. (Courtesy of Roku)
A partnership between Walmart and Roku isn’t just about enabling advertising on the streaming device. They are also bringing commerce capabilities to streaming content. Under a pilot program, Roku ads purchased by brands through Walmart Connect, which is Walmart’s advertising arm, will contain merchandise that can be shopped with a Roku remote. Checkout is completed via Roku Pay, and the goods are fulfilled by Walmart. It points toward a future where CTV reduces the number of steps between seeing a product in an ad and buying it.
This week, Walmart Connect provided details on its capabilities to serve ads to platforms beyond the retailer’s own channels, such as social and video platforms. This presents intriguing prospects to potentially bring ads to other streaming services, as well. The retailer recently inked a deal with Paramount+ to offer that service for free to Walmart+ members. Will advertising tie-ins follow?
Disney+ is set to launch an ad-supported plan of its own. Disney+ Basic is set to launch December 8 at the service’s lowest price-point of $7.99 per month, giving it a similar model to Disney-majority-owned Hulu. It will add to an already-strong streaming ad business for the house of Mouse. In its most recent Upfront, Variety reported that 40% of Disney’s $9 billion in advertising commitments went to streaming and digital.
Ads for Disney’s own products may be coming soon, too. According to the Wall Street Journal, Disney is also planning to integrate commerce for its own merchandise by the end of 2022. Under one plan reported by the media outlet, viewers will be able to click on a QR code and purchase a toy that is associated with the content that is being viewed. Disney is also reportedly exploring a membership program, which could help it gain more data about its customers – the very first-party data that could help to make advertising more effective.
Offering brands an avenue to stand out on ecommerce platforms, retailers are standing up their own in-house advertising capabilities, called retail media networks. One example is Kroger Precision Marketing (KPM), the retail media arm of the grocer Kroger. These networks harness first-party data from customer purchases to power advertising – a powerful tool anytime, but particularly now that many are questioning the effectiveness of third-party tools following iOS 14. In Kroger’s case, that first party data draws from the 60 million households that the grocer reaches annually.
As of this month, KPM is now making its sales data available for use in programmatic advertising, which describes digital ad space that is automatically bought and optimized. Advertisers will be able to use the data to reach people through inventory suppliers like Magnite, OpenX, PubMatic, and Xandr.
“Streaming is the number-one way people consume TV today,” said Cara Pratt, Senior Vice President, Kroger Precision Marketing, in a statement. “That means the majority of TV viewing hours can now be optimized in the programmatic environment. Our retail data precisely reaches households – such as lapsed or infrequent brand buyers – and then matches advertising exposure to store sales to measure brand impact.”
It builds on the Kroger Private Marketplace, a self-service platform where advertising agencies and brands reach households by applying the sales data to programmatic campaigns within a preferred ad-buying platform. Now, advertisers will have self-service access to audience intelligence, customizable CTV and video inventory and campaign measurement against attributable retail sales and household penetration, KPM said.
It’s a sign of how ads that end up on streaming platforms can start with a retailer, get enhanced by the data it offers and be served by automated systems.
Accurate inventory is now essential for Amazon FBA sellers, writes Emplicit's Evan Sherman.
Amazon used to be a lot more laissez faire about how Fulfilled By Amazon (FBA) sellers used their fulfillment centers. Sellers could send in inventory, and, while the space wasn’t unlimited, if their sales were not as forecasted they would simply pay long-term storage fees. Sure, if a seller’s inventory management was poor enough they would have their inventory storage limits reduced and pay higher storage fees, but this was just an incentive not to let things slide too much.
However, in 2022 Amazon reduced storage limits overall to the point where some FBA sellers had sales and catalog size impacted, and in March 2023 Amazon revised their inventory system. There is now an incentive for FBA sellers to be highly accurate with inventory management because Amazon will reward them with increased storage limits. Precision is a carrot now, rather than a stick.
In this article, we provide five strategic methods that sellers can utilize to optimize inventory management on Amazon.
Achieving successful inventory management on Amazon requires a profound understanding of past demand patterns and the capacity to accurately forecast future demand. Seasonality, market trends, historical sales figures, competitor activity and planned promotions all play a crucial role in determining the trajectory of sales.
At Emplicit, we advocate for the analysis of multiple historical data points, encompassing previous 7, 30, 60, and 90-day sales figures. Our logistics experts factor in internal factors such as stock availability, marketing spend, promotions, and sales and margin targets, and external factors such as seasonality, Amazon trends, new category restrictions and market entrants. A comprehensive review of shipments in working, shipped, or receiving status is also beneficial. Striking a balance between what has been sold, what is available, and what's en route to an Amazon fulfillment center is key to precise forecasting.
Inventory management isn’t a static task; it requires constant vigilance and flexibility. FBA sellers should regularly review and modify their demand forecasts, adjust their replenishment suggestions based on demand shifts, and update their minimum reorder points as required.
Sellers should review sales daily, plan replenishment frequencies to suit their needs, and maintain appropriate inventory levels at Amazon. Weekly replenishments can help keep a seller’s inbound pipeline full, minimize out-of-stock instances, and account for unforeseen supply chain disruptions.
Amazon’s organic and paid algorithms prioritize products with high sell-through rates. This means best selling products end up selling better. Focusing on high-performing items allows FBA sellers to reduce monthly storage costs, avoid aged inventory and the associated fees that Amazon imposes, and curtail the need for costly removal orders. And sales velocity is the quickest way to get Amazon to increase your storage limits. Concentrate on the 20% of items that generate 80% of sales.
At the same time, sellers should prune their catalogs by removing slow-selling items. These items negatively affect Amazon’s Inventory Performance Index (IPI) score, which directly influences the space Amazon allocates to a seller’s inventory in their fulfillment centers.
If sellers are tight on inventory space, as well as the best-selling products, they should prioritize products with higher margins until Amazon provides additional storage, and they should reduce marketing spend accordingly – something which necessitates a close relationship between inventory and marketing.
Ranking products by sales and margins, and calculating the storage space each product takes up will go a long way towards understanding and anticipating demand on Amazon.
Amazon’s capacity management system is a new system for allocating inventory limits to FBA sellers and allowing sellers to gauge their inventory capacity at Amazon’s fulfillment centers. It also enables sellers to bid on increases to their inventory limits.
Previously, Amazon had restock limits which were updated weekly based on the seller’s previous 90-day sales. Restock limits were determined by Inventory Performance Index (IPI) metrics such as sell-through, excess inventory, and stranded inventory. However, because the restock limits were updated weekly, it was challenging to plan accordingly, especially heading into a peak season or if a seller was about to run a promotion.
With Amazon’s Capacity Monitor program, sellers are given a monthly capacity outlook based on the cubic feet of space occupied by their products in Amazon’s fulfillment centers and their IPI metrics. Amazon not only provides a current month outlook on available space; they provide an estimate for the next three months which can aid in the inventory planning process.
To take advantage of the new system, it’s imperative FBA sellers understand their product's physical footprint in relation to the allotted space Amazon provides (Amazon does still provide unit estimates). Knowing a product’s cubic feet and the product tier designation allows for effective planning of inventory replenishment. Exceeding space limits means overage fees from Amazon, however, if a seller knows they have a peak in sales coming up they can bid for additional capacity (in cubic feet). However, selling-through this additional inventory means Amazon waives those fees, so it’s a win-win.
At Emplicit, we have seen the capacity monitor program benefit our clients, with many clients seeing an increase in the amount of inventory they can ship in – likely due to healthy sell-through velocity and other IPI metrics. The program has fundamentally changed the way we approach managing our inventory on Amazon, so everything sellers do regarding inventory planning should be within the context of Amazon’s capacity monitor program.
Smart sellers should already be considering the impact of their product packaging on their FBA fulfillment fees. If the actual product size allows, sellers can generate significant savings by reducing the size of their packaging. Amazon’s Small Standard rates are 15-20% cheaper than Large Standard rates depending on weight, and Amazon’s Small & Light rates are 15-27% cheaper still than Small Standard rates. However, fulfillment cost savings are not the only reason to reduce packaging size, smaller packaging can significantly increase Amazon inventory cost-efficiencies.
With Amazon’s capacity management system providing inventory space based on cubic feet rather than number of units, the space each product takes up is now more important than ever. While larger packaging sizes can sometimes improve sales in brick and mortar retail, sellers should consider developing smaller Amazon-only packaging. This will not only reduce fulfillment costs, but allow more units to be stored in the same inventory space. The combined savings can more than offset the cost of a redesign and second packaging print run.
Additionally, smaller packaging may qualify sellers for Amazon’s Compact By Design badge. This helps brands stand out, and increases click-throughs and conversions. (We suspect there are algorithm tweaks for brands with certain badges too, but it’s difficult to prove.) Amazon-specific packaging can help with Transparency (anti-counterfeiters) and help combat unauthorized resellers.
While it might seem like a significant investment and not something the inventory team typically gets involved with, reducing packaging size is a long-term way for FBA sellers to optimize inventory management.
Amazon Global Logistics (AGL) offers a streamlined solution for sellers whose products are manufactured in China. AGL eliminates the need to use freight forwarders who would usually receive a shipment from China, then split up that shipment and forward on to multiple Amazon fulfillment centers per the standard FBA process. Instead, sellers can book shipments directly with Amazon, complete the necessary export/import documentation, and ship directly to US, UK or European fulfillment centers – sending the entire shipment to a single fulfillment center.
If leveraged properly, AGL can save sellers thousands of dollars in warehouse and 3PL fees and reduce the need for inventory to be processed multiple times before it arrives at Amazon’s fulfillment center, meaning inventory gets where it needs to be quicker.
AGL offers two shipping options – Standard Ocean Freight and Fast Ocean Freight – with the standard option giving sellers the opportunity to either ship via a full container load (FCL) or less than container load (LCL). Shipping partial container loads with Amazon doesn’t slow shipments down versus other carriers because of Amazon’s scale. Amazon’s economies of scale mean that AGL can offer shipping prices from mainland China and Hong Kong that most sellers are unable to match. And Amazon’s expert customs brokers get products cleared through customs quickly because Amazon has a vested interest in shortening the time to market.
This one-step international shipping direct to Amazon was actually something we pioneered before the advent of this service from AGL – working with our client Shapermint and their manufacturers in China and logistics team to ensure packaging and shipments were FBA compliant. However, now AGL offers this service, it’s an even easier solution to a common challenge. We suspect AGL will roll out in other international manufacturing markets, but Amazon is tight-lipped for now.
Amazon inventory management is complex and needs constant attention. Sellers can hire a fractional inventory specialist because this is not something that should be trusted to an Amazon generalist. If sellers get inventory right, it will keep pace with sales. But if they get it wrong, their inventory can become the main thing holding them back.
Evan Sherman is the director of logistics at Emplicit.