Education Is Key To Future Growth for Video Advertising

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BrightRoll dropped some numbers from their second annual survey about what media buyers and agencies are planning in regards to spending patterns for online video advertising.  Let’s see what they had to say.

Online video has moved into the comfort zone of many media buyers and agency execs it seems as they are spending or planning on spending more. 56% of them in fact stated that online video ads are ‘more effective‘ or ‘much more effective’ than other forms.

But that’s nothing. An amazing 94% stated they would be spending more in the area than they did in 2009. That’s up 7% over last year.

Brightroll CEO, Tod Sacerdoti said,

“Over the last year, online video advertising has continued to mature as a trusted and proven medium for reaching highly engaged audiences at scale across premium content sites online. As CPMs continue to drop, better metrics emerge and as the industry agrees upon a defined set of standards, the survey results show that this segment of online advertising will continue to become a staple in every media buyer’s arsenal.”

It’s all ’bout the Benjamins Baby!

Many believe that the ROI is increasing and this could be the driving force behind the expansion. Part of that is due to lower rates, better targeting, more access to quality inventory and the emergence of performance-based metrics like cost per engagement (CPE) and cost per video view (CPV). Other factors include respondents having completed campaign and learned what works and what doesn’t as well as now being able to better negotiate favorable deals for ad placements to get the most value out of them.

Even though price was cited as a factor for expansion this year there is still some concern over it to the point of them calling it ‘prohibitive.’ 32% believe that lower costs would speed adoption. Of course if everything were free, everyone would do it right? Considering that they openly admitted to it having a higher ROI, it would seem that pricing is fairly in line with what the market expects and in reality, 68% believe it to be so, a fair percentage to say the least.

Other factors the respondents believe are holding online video advertising back include the need for better success metrics, better-defined industry standards, and a more transparent formula for ROI.

It’s time for a paradigm shift!

The largest factor for current CPM models is the quality of the content on the sites where the ads will be shown. Of course, that’s a no-brainer really. Who would want their ads to show up on bland news aggregate sites or sites with no original content? It only makes sense that we would all want our ads to show where the content is of comparable quality and the viewers are willing to engage with it.

In regards to what the clients are asking for, their main concerns are cost, CPV, CPE and CPM in that order. Cost per view is certainly the strongest potential pricing platform from these numbers. Of course, we have to fully determine exactly what a “view” is. Personally, I’m all for the “over 50%” rule. But I’m a publisher not an advertiser so much. Certainly the ad needs to be displayed in a place where it is seen and not down in the corner of the page where it plays while the viewer is at the top of the page interested in some other content. What would be a great feature would be the ability to start the ad when the ad unit comes onto the browser screen (i.e. when the user scrolls to where the ad is). That would certainly be something innovative. Unfortunately, it’s well beyond my technical expertise and probably isn’t even possible.

I Know That You Know That I Know Where

Advertisers know exactly where they want to place these ads, not just how they want to purchase those placements. A full 54% stated they want to find interactive pre-roll placements (even though there is some data that suggests that pre-roll is problematic – see this story). A full 20% of the respondents said they would work toward some form of branded entertainment.

The purpose of a branded entertainment program is to give a brand the opportunity to communicate its image to its target audience in an original way, by creating positive links between the brand and the program –Wikipedia. This is popular in many areas and by marrying the content with the brand there’s less worry of the message not getting across.

In video games branded entertainment is all the rage, see the latest Audi video game for that evidence:

We all Need a Little Street Cred

The number one thing harming the industry according to the respondents? Auto-Start! Yes a full 45% of them stated this was the most harmful factor with misrepresented pre-roll being second with 26% and ads below the fold coming in third with 22%. Those are all excellent factors that need to be addressed by the industry. If a publisher is showing ads from a network then it is the responsibility of the network to make sure they are being run according to the specifications, in the pre-defined place and as often as being stated.

But it’s also the publishers duty to place the ads where and how they state they will. Especially when looking at the break down of the budgets for last year where 43% went directly to publishers and 42% went to networks. What this means is that all contracts need to have clear cut specifications on where and how the ads will be placed or it will be considered a breach. Putting that into the mix will certainly bolster advertiser confidence in the ad placements. If I were shelling out cash to have my ad run on a page pre-fold and found it that to not be the case I would most surely pull my campaign from the publisher site and/or the network and be unlikely to ever deal with either of them again. In fact, I would be compelled to tell everyone about. Perhaps what we need is some sort of watchdog that keeps an eye on these things to help create a better sense of responsibility in the industry which would then transfer to a higher level of trust on the part of the advertisers.

Education is the Key to Future Growth

“Online video underwent a cycle of massive innovation in 2009, and has matured into a highly effective platform for advertisers to connect with their target audiences online,” said BrightRoll CEO Tod Sacerdoti. “My hope is that this study will form the basis of a continued effort to educate the industry about online video’s capabilities, as well as the areas that need attention in order for it to continue to move forward. The BrightRoll team looks forward to contributing to the category’s continued success and evolution.”

I have to agree with him. Better educating the advertisers will certainly help build confidence in the format. While we will never be able to cater to the needs of each and every advertiser, business is about compromise. There are certain things that can be done to get them a good mix of what they want and need without giving it all away. CPV and CPE are certainly valid options to help drive growth. However, both “view” and “engagement” need to be clearly defined so that the advertisers know exactly what they can expect and what exactly they are paying for. After all, you wouldn’t buy a house without seeing it first, would you?

Now many of these numbers should be taken with a grain of salt. After writing this, I found out that there were only about 100 respondents. That’s certainly a tiny percentage of the industry as a whole. It makes me think that perhaps ReelSEO might want to commission one of these studies and get as wide a cross-section of the industry as possible.


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