When viewers tune in to the 2024 MTV VMAs on Wednesday night, they'll be able to buy the clothes and designer looks they see in real time, as traditional media companies look for new ways to monetize content.
As part of the new partnership between Paramount Global In partnership with MTV parent company MBC and shoppable advertising company Shopsense AI, viewers will be able to purchase the clothes they see on screen using the startup's new AI lens, which will launch at the start of the awards show, Shopsense told CNBC.
The company said the program will allow viewers to take photos of their favorite looks as they appear on screen and then browse similar options suggested by Shopsense's product recognition algorithm.
The partnership and potential future deals could be a boost for retailers hurt by consumers pulling back on discretionary spending, and traditional media companies trying to maintain profits in a challenging environment. Every time someone buys something through the new feature, or in some cases even when they click on an item, some of the revenue will go back to Paramount, according to Shopsense.
“Everyone has their phone or tablet in their hand while they’re watching TV,” Brian Cowen, a former Amazon executive and co-founder and president of Shopsense, told CNBC in an interview. “This allows people, in a non-obtrusive way … to go through that shopping journey without pausing the content.”
Paramount’s partnership with Shopsense was a key element of its May presentation, when media companies make their annual pitch to advertisers. The agreement comes as traditional media companies look to generate new revenue streams and find different ways to monetize their content.
While media companies have relied on advertising revenue for some time, it has become more important as they seek to make their streaming businesses profitable. Paramount — which recently agreed to merge with Skydance Media — will air the Video Music Awards on both MTV and its streaming platform, Paramount+.
Legacy meets AI
Advertising and media companies have been turning to generative AI tools, such as shoppable ads. Disney announced a similar partnership earlier this year with Gateway Shop, launching a pilot for its first native, shoppable ad format across live streaming.
“The growth of AI across the entire advertising industry is revolutionizing how brands reach audiences,” said Natalie Bastian, Global Marketing Director at Teds.
“Integrating AI drives measurable results, maximizes media effectiveness and improves return on ad spend across the industry,” Bastian added.
Since most celebrities attending Wednesday’s VMAs will likely be wearing designer clothes, Shopsense will suggest counterfeit clothing at various prices. Shopsense can identify more than a billion items of clothing on the shelves, according to the software.
“For impulse buys, the immediacy this format offers is particularly effective, as it taps into the viewer’s spontaneous desires, often triggered by limited-time offers or exclusive deals,” said Laura Taylor, head of retail media investment at Goodway Group.
Television viewing is heavily dependent on live events, especially sports, news, and awards shows like the Video Music Awards. Because they attract the largest audiences, live content has attracted the most advertising dollars, even as the advertising market has recovered from years of recession.
The advertising market took a hit shortly after the pandemic hit, as companies often pull back on ad spending during times of economic uncertainty. However, companies have reported this year that the advertising market is rebounding, particularly for digital streaming players.
While ad revenue for Paramount’s traditional TV business declined in the second quarter, Paramount+ posted its first profit, driven by subscriber growth and higher prices. John Halley, president of Paramount Advertising, said that despite a wave of consumers shifting from pay-TV to streaming, the majority of viewers still watch traditional TV.
As Paramount gears up for another major live event, Haley called the Shopsense integration “absolutely a game changer” when it comes to how viewers experience the VMAs.
“It’s something that provides brands with an amazing access point and opportunity to reach consumers… in an environment that’s convenient for them to buy their products,” Haley said.
“Once you get the consumer into the environment, first of all, they tend to stop and reflect, so they’ll browse and look at a bunch of stuff, and secondly, the revenue per user in these environments is very high. The conversion rates are high,” he said. “It’s really about getting the consumer into the second screen experience and then the technology does the rest.”
In the future, Shopsense is looking to work with other media companies and their apparel teams so viewers can buy the exact products that appear in all kinds of TV shows, like the power jackets seen on HBO's “Industry” or the cookware seen on “The Best.” Fox “Master Chef.”
“We’re turning TV into a retail powerhouse, right?” said Glenn Fishback, Shopsense’s CEO and other co-founder. “We’re promoting, enabling, activating and allowing potential TV broadcasters to reclaim the living room and create a curated secondary screen experience. This should be a form of entertainment where I can not only enjoy shows, but also buy furniture. I’m a part of it, and that’s what we think Lens does.”
Quinn declined to say what other streaming companies the retailer is in talks with, but said Shopsense is in “active conversations with all the major media companies.”
What about retailers?
Shopsense has partnered with over 1,000 retailers, including: Maisie, Nordstrom, Urban Outfitters and SpinGoogle has announced a partnership with retailers to showcase their products on the platform. The partnership gives retailers the opportunity to engage customers at the moment they’re inspired by something they’re watching on TV. It’s another example of how they’re leveraging AI to make online shopping a more engaging and engaging experience — though it’s unclear whether it’s leading to significant sales.
In 2022, Walmart Collaborated with Rocco Consumers were supposed to create interactive product ads that allowed viewers to use their remote control to click on an item and buy it. However, the consumer had to pause the content and use the TV screen to make the purchase, which took them away from what they were watching and wasn’t exactly a seamless shopping experience.
“The biggest difference here is there’s absolutely no friction. You pull out a phone and point it at the TV, and that’s where the images come to life on the screen,” said Paramount’s Haley. “We’ve learned over and over that the experience has to be seamless. You can’t ask the viewer to adopt a completely different behavior, right? People typically watch TV on their phones, and the opportunity to extend the experience to the second screen is very compelling.”
Not only will consumers be able to find the looks they see on TV, Shopsense will also showcase curated collections inspired by the content. For example, with the Video Music Awards kicking off on Wednesday night, the site will showcase collections inspired by last year’s show and a “Get Ready With Me” selection from Macy’s that includes red carpet looks, fragrances and accessories, Shopsense said.
“Oftentimes, we bring in similar elements that thematically fit the content,” Quinn said.
For example, a selection of New York winter looks can accompany a season of Disney “Only Murders on the Block” or a set of burnt orange apparel can be served with a Texas Longhorns game.
“Combining TV and retail is a great way to help consumers research and engage products when many are cutting back on discretionary purchases,” said Jessica Ramirez, senior research analyst at Jane Haley & Associates.
“When you watch TV, you look at something. ‘Oh, I really like this lipstick, I like this dress, maybe it’s something I want to wear to a wedding,’ and if there’s a way to easily browse content while you’re shopping, that’s another channel,” Ramirez says. “It’s a great idea and it makes sense, but with this kind of thing, execution is critical.”
