3 Ways Connected Home Strategies enhance full funnel advertising

April 30, 2024 | By Michelle Winters, Director, Product Marketing, Amazon Ads

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According to a study from Kantar and Amazon Ads, 90% of U.S. households now own and use a smart device. From the largest connected screens (CTVs), to smart speakers, to tablets and beyond, these internet-enabled technologies have become a seamless part of consumers’ lives.

For advertisers who need to meet consumers where they are with relevant messaging, this means fresh ways to engage vast audiences through daily experiences that naturally integrate across devices.

The connected home—that is, the interconnected smart devices, apps and voice assistants that provide automated and tailored experiences for both individuals and the entire household—allows for the possibility of true full-funnel campaigns. Advertisers can build brand awareness, increase consideration and assist customers to take further actions.

And it can achieve those results more effectively than other channels: The Kantar and Amazon Ads study also found audiences are 3X as likely to be receptive to ads on connected devices vs. ads on social media.

So, how do connected home strategies help advertisers connect content to commerce, often at a higher level of efficacy? In three ways: interactivity, relevance and attention.

Interactive, immersive ad formats

The revolutionary innovation of digital advertising was the click. Whereas, before, a consumer might see a billboard or a TV commercial and carry on, online ads allowed the consumer to take an immediate action—to click to learn more, make a purchase, etc.

Today, consumers have more ways to interact with an ad than just clicking—and many of those opportunities are unique to the connected home.

One of these ways is with voice calls to action. Imagine an Echo device in your kitchen. As you prep dinner while listening to ad-supported Amazon Music, you hear an interactive audio ad for a kitchen appliance. Now, you can get information in real time by saying, “Alexa, send more info” or purchase the item with, “Alexa, add to cart” to your smart speaker.

The same interactions are also available in video, where a voice command or simple remote click during a show can bring you product details—all without disrupting your viewing experience.

Branded experiences with Alexa represent another example of interactive formats. These are custom experiences that consumers can launch via voice, screen-tap or remote to learn more about the brand, interact with exclusive content or shop for products.

The ability for consumers to interact, in real time, in new and creative ways with ads across home devices is a major advantage—especially when marketing strategies can have cohesive messaging across connected home devices.

For example, incorporating Alexa across Fire TV, video ads and audio ads brings an integrated experience to consumers during their daily routines. From internal campaigns in 2023, Amazon Ads saw a 79% increase in incremental reach when adding device and audio ads to streaming TV campaigns, as well as 3.2X new-to-brand purchases.

Relevant, contextual messaging

The variety of devices within the connected home lets consumers signal their streaming, browsing and shopping preferences across a range of touchpoints and contexts. Advertisers and consumers both can benefit from these insights because advertisers can serve more relevant ads, which can be less disruptive and more valuable to consumers.

Connected home devices are a node in a fast-growing type of ad technology, called retail or commerce media. Described by McKinsey as a “paradigm shift in digital advertising not seen since the rise of programmatic,” commerce media refers to digital ads served by shopping sites, like Amazon. What distinguishes these networks is their ability to find the relationship between media impressions and shopping behaviors—essentially, connecting the dots from ads to purchases.

For advertisers to effectively meet consumers where they are with relevant messaging, and deliver an enhanced customer experience, they need rich insights. Combined with the interactive capabilities of connected home devices, this allows consumers to discover messages that matter to them and take immediate action to explore a brand, research a product or purchase.

Envision an advertiser running a snack ad on the Fire TV home screen while its audience is preparing for movie night and browsing for content on Prime Video or other partner content apps. This interactive ad, reaching a customer in the right mindset, provides the opportunity for engagement, or even shopping for the brand’s products in that moment. Or the advertiser could strategically serve an ad for a new appliance on an Alexa-enabled device screen after a cooking video.

Marketing that infuses robust customer insights can make an ad feel more like a helpful suggestion, rather than an intrusion to help grow brand trust and favorability. A survey of Amazon connected consumers shows that they’re 10% more likely to prefer brand messaging that is relevant to content they’ve previously interacted with, aligned to their streaming interests or past shopping behaviors.

Attention, attention, attention

Of course, all the insights and interactive capabilities in the world don’t mean anything if the consumer isn’t paying attention.

Compared to other marketing channels—think, mindless scrolling on social media—ads on connected home devices tend to reach an audience that is more engaged and purposeful in their consumption, considering that Amazon connected audiences are more likely to be receptive to ads on connected devices vs. social ads.
The impact of interactivity, relevance and consumer attention has resulted in successes for advertisers who use the connected home to engage audiences.

“We took a connected home strategy for our ‘Electrification’ campaign to bring multiple ad products and devices together, leveraging Amazon insights,” says Lisa McQueen, media manager at Lexus. “The results were positive, showing Lexus breaking through the clutter of a highly competitive category, delivering a 3X lift in awareness, while building new experiences with potential consumers.”

The Martha Stewart brand also saw similar success when building awareness of their new Amazon storefront. “To make a memorable debut, we integrated Martha Stewart directly into consumers’ living spaces by syncing up with all connected devices like Fire TVs, Alexa Home Screens and Echo devices,” says Golda Wollner, senior digital markets manager at Marquee Brands. “This integrated home strategy outperformed Kantar awareness benchmarks by 3X, and creatives running an Alexa call-to-action delivered a lift of 10% in purchase intent.”

The next chapter in consumer engagement

“The connected home represents an exciting canvas for advertisers,” notes Abhoy Bhaktwatsalam, VP of device ads at Amazon Ads. “It’s a way to reach audiences throughout their day, in a seamless, native manner. The real-time, interactive, integrated nature of the connected home represents a powerful way to tie the customer journey together—from brand awareness to purchase, and every step in between.”

From personalization to contextual marketing, the benefits of the connected home are clear: enhanced audience engagement, increased relevance and the potential to reshape the brand-consumer shopping relationship.

And with substantial growth in AI capabilities coming fast, marketers are witnessing just the tip of the iceberg in unlocking the vast potential of connected experiences.