Video Ad Spending: Moving From TV To Online

Video is the fastest-growing digital ad format according to eMarketer. US digital video ad spend is expected to rise by 41.4% this year and by nearly 40% next year as well, when outlays will reach $5.7 billion.

Findings from the Interactive Advertising Bureau (IAB) show that much of that increased digital video spending will come out of former TV budgets. Seventy percent of buy-side US senior executives told the IAB they would likely move TV dollars to digital video in the coming year. An even greater 75% of all US senior executives surveyed said the same, suggesting there is significant excitement around digital video from all corners. However, those on the buy side may be slightly more realistic about how budgets will really move.

As to which digital video ad formats would likely see the biggest bumps in investment, an April 2013 study from Be On, a division of AOL, found that 73% of marketers polled worldwide expected to increase spending on pre-roll ads over the next 12 months. Social video ads came in second, at 53% of respondents.

Putting dollars to digital video, though, does not have to mean leaving TV behind, and there are increasing opportunities for cross-platform ad campaigns, something marketers seem particularly excited about.

According to the IAB, nearly two-thirds of respondents who had previously launched cross-platform ad buys seemed happy enough with their results that they said they would increase their budget for combined TV and digital video buys going forward.

Five Reasons Advertisers Should Adopt Interactive Pre-roll

A recent study, conducted by in-stream advertising specialist AdoTube, measured 9,500 digital brand campaigns and nearly 13.5 billion impressions over a period of three years. In their study, they found that while pre-roll video ads drive the highest completion rate, both the viewers and advertisers have stronger experiences with interactive pre-rolls globally.

Five Reasons Advertisers Should Adopt Interactive Pre roll

Today, pre-rolls have been transformed to offer interactive functionality that enables customized advertising experiences to deliver higher acquisition, conversion and retention rates compared with traditional online advertising.

Here are five reasons why interactive pre-rolls (Polite Pre-Roll, Ad Selectors, and In-Stream Takeovers) are redefining what video can achieve and why advertisers should continue to adopt these units:

1. Interactive and willing viewership

An average of 69.2% of users actively engages with interactive pre-roll by clicking through, watching the whole video or dismissing the units. But the word “dismiss” is not often a beloved term in digital advertising. However, though initially unintuitive, the study discovered that including the dismiss button can actually reduce page abandonment by as much as eight percent.

When the Polite Pre-Roll®, an interactive pre-roll, was introduced in 2009, it revolutionized online advertising by giving viewers the option to continue watching or to dismiss an ad after five seconds. That simple element of control, or enabling users to dismiss the ad, has had profound implications on the way consumers around the world experience and perceive advertising.

Other forms of this creative launched around the same time, such as TrueView. However, AdoTube’s format has proven to be most successful, with 11% dismiss rates, much lower compared to TrueView’s 55% to 85% rates.

Discovering that the “dismiss” option yields higher retention rates is significant. Although the psychology behind this phenomenon is complex, it is easily expressed; the more people feel they can control the experience, the more likely they are to watch it. This is contrary to how most advertisers think; they are afraid to give users the power to opt out of their ad.

If a user chooses to dismiss the interactive pre-roll, they are provided with an opportunity to re-engage with the ad or visit the brand’s website at their own convenience. This is relatively non-intrusive, yet very effective, for allowing interaction when the user is ready, or in the purchase mindset, to view the video.

2. Global support and growth of brands

As technology continues to evolve alongside the growth of global brands, enforcing message continuity from country to country can be a challenging – and costly – undertaking. To meet this need, interactive pre-roll allows for the same assets to be adjusted for different regions and are made easily updateable to tailor to each audience. This provides advertisers with a flexible, resourceful and global-centric campaign that maintains a consistent message despite differing geographies.

Global adoption of interactive pre-roll proves effective in numerous markets. In a recent study conducted by AdoTube, the highest interaction rates were found in Russia at 8.6 percent, followed by 8 percent in Southeast Asia, 6.5 percent in Middle East, and 5.6 percent in India. The more mature markets (i.e. Australia, Canada, UK, & US) also saw stronger performance. More specifically, Canada has shown strong, consistent growth for in-stream video quarter over quarter, and ran twice as many campaigns in Q4 2012 vs Q3 2012.

Also, to note – Q4 proved to be the most active across all global markets for online video, an indicator of continued growth for the sector.

Five Reasons Advertisers Should Adopt Interactive Pre roll

Global adoption of interactive pre-roll proves effective in numerous markets.

3. Delivers more qualified views and clear call-to-actions

Compared to standard pre-roll, interactive pre-roll boasts higher engagement rates, therefore driving its users to be more likely to retain the information or respond to the call-to-action feature. For example, in a recent “Just for Men Autostop” campaign that included both interactive and standard pre-roll, interactive pre-roll exceeded success metrics in comparison to its counterpart. The interactive video delivered 10% higher engagement rates, lifted brand awareness 2X more effectively and achieved 42% higher brand favorability than the standard pre-roll unit. This makes sense, since the user can view, read, and hear the message throughout the ad spot using an interactive unit. In contrast, a standard pre-roll invites the user to be engaged only when the brand message is explicitly delivered – usually in the last 2-5 seconds of a spot.

Five Reasons Advertisers Should Adopt Interactive Pre roll
Furthermore, with interactive pre-roll, the user is self-electing to consume the brand messaging, resulting in a greater probability that they will engage with the call-to-actions – which, in interactive pre-roll, are more aesthetically and seamlessly presented than a standard pre-roll unit. Overall, these features foster positive user experiences, generating a “stickiness” that increases brand recall.

4. Complements programmatic ad buying

With programmatic marketing, advertisers combine data with real-time systems to essentially automate the delivery of targeted ads. The value is not only being able to target consumers with precision, but to do so quickly, in a way that allows the advertisers to adjust a campaign if it isn’t delivering. To complement this demand-side strategy, interactive pre-rolls are also flexible, providing advertisers to quickly change their messages or call-to-actions to meet campaign targets. In contrast, the process to adjust a standard pre-roll, or to re-produce its spot, is simply too slow, inefficient and costly. In this instance, standard pre-roll fails to keep up with the automatic processes of programmatic buying.

This is extremely important in a progressively multi-screened world where brands are trying to maximize their advertising between TV and digital video devices (computers, mobile, and tablets). These mediums should complement each other. In order for that to happen, advertisers need customizable, nimble, and intelligent ads that are engaging across device.

5. Boosts evolution of creative technology and intelligence across screens

It is important to note that interactive pre-rolls have also evolved from giving viewers the option to dismiss ads to a true user-directed experience. Let’s take a look at AdoTube’s Ad Selector, the functionality that allows advertisers to feature multiple videos, giving users the choice of which video to watch and when. This allows an advertising conglomerate to feature several products or promotions of a particular brand, or even multiple brands of the same conglomerate, and see which user is attracted to which ad the most.

After conducting this same experience with numerous control groups, the advertiser is given ample, invaluable insight into the “who, what, where and why” of their consumer base – which audiences were most drawn to their product, specific product preferences, and when and where the message was delivered to capture attention. Advertisers can then leverage this data to drive strategy across all mediums that is most relevant for their audience.

Many companies are taking advantage of new developments in in-stream video, but not all pre-rolls are created equal. Interactive pre-rolls return the control to the consumer, while still providing brands with the data needed to drive intelligent advertising and the flexibility to adapt to multiple screens, global demands and campaign changes. These units are a win-win for the advertiser and the consumer, and will continue driving the evolution of the video industry.

Currently we are working on an exiting new product, the development of 15 and 30 sec, pre and post roll commercials as part of our stock library ReeldealdHD offering. These “Directors Cut” commercials are the easy and affordable solution for SME advertisers. Stay tuned for more exiting news on this soon, in the mean time if you would require a pre- or post roll commercial please get in touch:

AOL, Microsoft, and Yahoo Kick Off Display Ad Deal

The ménage à trois in display advertising among Yahoo, Microsoft, and AOL has started on schedule. The three companies said today they are officially offering one another’s unsold inventory.

As a result, all three sales forces now have access to a trough of Interactive Advertising Bureau standard ad space bigger than any offered in one place before. But more important than reach and volume is quality, as the deal’s architects pray media buyers will view the new marketplace as the first stop for brand campaigns concerned above all with locking in “premium” media.

Yahoo and AOL’s ads will be served on the Right Media Exchange, while Microsoft will use its own branded exchange, which is built on the AppNexus platform.

The agreement, announced in November 2011, spans not only the portals’ branded sites but also network partners. It lets the three companies do what ad networks have been doing for years – resell each other’s media. The main difference is a matter of scale and complexity. AOL, Microsoft, and Yahoo together represent a greater variety of inventory types than is available through smaller ad network companies.

One risk is that the arrangement could remove the differentiating audience characteristics of the companies’ three ad network products: Yahoo’s Network Plus, AOL’s, and the Microsoft Media Network. Those networks will still offer unique data and other capabilities.

Another interesting question is how intensely these three ad sellers will compete to be the point of contact for agencies. In a blog post today, Yahoo advises its media buyers interested in accessing inventory on Microsoft and AOL to “please contact your Yahoo account executive or account manager.”

“I want to thank Yahoo and AOL for their partnership on this agreement, which took a concerted effort from all parties,” Daniel Scheinberg, senior director, display marketplaces at Microsoft Advertising, wrote in a blog post. Four months ago, the trio announced the partnership would take effect in the first quarter of 2012.