The Hottest Trend With Fashion and Apparel Advertisers: Connected TV

2024 Will Be a Standout Year For Digital Advertising

Nearly 264 million people in the U.S. viewed digital video content in 2023 — that’s a staggering 77% of the population. And in 2024, that number is expected to rise by more than 4 million.

With so many eyes viewing content on screens across households, it’s no wonder that advertisers — intent on reaching customers wherever they watch their favorite TV shows and movies — are investing in the channel. 2024 is set to be a big year for digital advertising — brands are predicted to spend close to $307 billion, a 13.6% increase year-over-year (YoY).

While many brands are dedicating more resources to digital advertising, one industry is dominating the trend: retail. Read on for more expert insights on how fashion and apparel brands are using digital advertising — Connected TV in particular — to produce meaningful performance.

Retail Digital Ad Spend Beats Overall Growth

Overall digital ad spend is on the rise, but in 2023, retail brands actually outpaced the market — and they’re set to do the same this year. Retail digital ad spend grew by 12.2% in 2023, compared to 9.7% overall. And in 2024, it is expected to increase by 14.2%, vs. 13.6% overall — if true, that means retail will have accounted for 28.6% of total digital ad spend this year.

Retailers Invest Considerably More in Digital Than Other Industries

Retail brands didn’t just outpace the overall market in digital ad spending — they also outspent other individual industries by a considerable amount. The $73.55 billion retailers put into digital in 2023 is a whopping $34.05 billion more than the next vertical (consumer packaged goods, aka CPG).

Apparel and Accessories Advertisers Spend Even More

If we drill down further into retail advertiser behavior, digital spend numbers are even stronger. Among apparel and accessories brands — who fall under the bigger umbrella of “retail” — the year-over-year increase in digital ad spend is predicted to be higher than retailers in general. Apparel and accessory brands are expected to spend $26.10 billion on digital advertising in 2024, a 20.4% YoY increase.

Fashion and Apparel Brands Use Connected TV To Produce Meaningful Results

Knowing that fashion and apparel brands have upped their investment in digital in recent years, we wanted to know how some of these advertisers fared on a specific digital channel: Connected TV (CTV). To do this, we analyzed first party MNTN Performance TV customer data of fashion and apparel advertisers.

Here’s what we found:

Spend was up. Our data matched eMarketer’s: fashion and apparel advertiser spend on CTV performance campaigns increased by double digits in 2023 vs. the year prior. This growth signals the rise in demand for (and adoption of) results-driven CTV efforts that deliver measurable revenue, conversions, and site traffic.

Cost per visit (CPV) and cost per acquisition (CPA) decreased. While ad spend was up, average CPV and average CPA went down YoY — by 20.1% and 27.3%, respectively. For this advertiser group, an increased investment in CTV paid off as the channel’s efficiency produced lower numbers where it counts.

Impressions increased. Many may still think of linear television advertising as the ultimate channel for producing the reach, but CTV can’t be left out of that conversation anymore. MNTN retail and fashion and apparel customers saw a 23% YoY increase in impressions.

Additional performance-focused metrics improved as well. Retail and fashion and apparel brands saw a notable YoY increase in average return on ad spend (ROAS), average visit rate, and average conversions. This growth can likely be attributed to two factors: CTV advertising technology keeps getting better, delivering more precise campaign optimizations, and advertisers keep getting smarter, iterating and learning how to make CTV work for them. Both have made it possible for brands to utilize CTV as a true performance advertising channel, one that can produce strong results in both the upper and lower funnel.

Q4 remains a pivotal time for fashion and apparel advertisers. The winter holiday season is the peak business time for many brands — and our data shows that fashion and apparel advertisers fared particularly well this year. Multiple key performance metrics improved in Q4 2023 compared to Q4 2022.

2023 Q4 performance held strong compared to Q3, as well — average ROAS grew by 42.3%, average visit rate by 15.7%, and average conversions by a whopping 133.9%.

Other seasonal shopping moments saw notable growth, too. The winter holidays tend to get all the attention, but that time period certainly isn’t the only one that generates results. Fashion and apparel advertisers experienced significant spikes in conversions and revenue around sale-heavy holidays Memorial Day, 4th of July, and Labor Day.

Conversions and visit rates grew steadily throughout 2023. When examining fashion and apparel advertiser data by quarter through 2023, conversions and average visit rate consistently trended upwards. This illustrates the effectiveness of what we call an “always on” approach to CTV advertising. While seasonal moments can help lift business, brands that run evergreen CTV efforts throughout the year can experience powerful long-term results.

Advertisers with ROAS as their primary campaign goal produced the most revenue. To ensure the strongest, most meaningful results possible, the MNTN Performance TV platform lets advertisers choose their primary campaign goal. And for fashion and apparel brands, choosing a campaign goal of ROAS paid off. Campaigns optimized towards ROAS produced millions of dollars in revenue for fashion and apparel advertisers in 2023.

For Digital-Focused Retailers, Connected TV May Be a Key Unlock to Full-Funnel Performance

We are living in an increasingly digital world, with screens everywhere we look. So it’s natural for advertisers to continue to up their spend on digital channels to keep up with consumers. And 2024 is expected to be a particularly strong year for digital advertising, especially when it comes to investment by fashion and apparel brands.

Connected TV has proven to be a powerful performance marketing channel that will produce real, long-term results. For retailers looking to drive meaningful business via digital advertising in 2024 and beyond, adding CTV to their mix could be the key to full-funnel success.