Is Incentivization Key to the Future of Online Video Advertising? [Study]

Is Incentivization Key to the Future of Online Video Advertising? [Study]

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Advertising is generally about getting the brand, product or company in front of consumers and trying to trigger something in them that causes them to interact, increase engagement, raise awareness or convert into a paying customer. But it’s not always very successful which is why there is so much advertising everywhere you turn. Perhaps there’s a better way to lodge your brand in the consumer mind, by offering them something in return.

The incentivizing, offering the consumer something in return for watching an advertisement, isn’t all that new. It’s been around for awhile now and has been a staple of revenue generation in mobile and casual games. There are a couple different platforms out there that allow you to do it as well including Tapjoy and Facebook credits.

The Jun Group, who tracked a sample of 7.7 million user-initiated video ad views between May and August 2012, have found that opt-in video completion rates jump to 98% from 64% and engagement jumps 3.5% versus 1.2% over standard pre-roll. Granted, it’s an extremely small subset of video ads and when you consider that something like 9.5 billion in-stream ads are seen a month, the margin of error is extremely low.

Basically, the Jun Group, who create and place opt-in video ads (meaning a grain of salt might be necessary here) are saying that the 15-second pre-roll is disruptive of the user experience and, “Increasingly, consumers resent it.” I don’t know about that statement, there’s no actual proof to back that up per se. Granted, sticking a 15-second ad in front of a piece of content that’s all of a minute long, isn’t going to endear you to the viewers and is certainly going to increase the abandonment rate. However, when used properly and in moderation, I think it’s a viable source of online video revenue and won’t be so off putting as to negatively impact brand awareness or consumer attitude. Hulu seems to be doing well enough and that load up at least two 15-second pre-roll ads before showing content. Considering that the content is long-form, it’s not all that unexpected. I definitely wouldn’t be putting them in front of super-short-form, sub-three-minute video content though.

Now the Jun Group report does have some numbers that are hard to swallow, but like I said, they have a fairly vested interest, since they make and place these particular types of ads, so Caveat Lector.

The completion rate numbers are fairly high, 99% of 15-second opt-in ads are watched to completion. I almost have to say DUH! I mean, consumers in general are willing to watch 15-second pre-rolls just to get to the content they want to watch, offering them something in return should be a no-brainer in regards to completion rate rise. The same goes for 30 and 60-second ads.

However, the Jun Group went further and said that 90% of 90 second and 87% of 2 minute advertising opt-in videos are completed. Without knowing exactly what was promised the viewers of these videos, it’s hard to gauge the actual meaning of those numbers. Would I watch a 2-minute advertisement to get a couple MP3s I want free? Probably. Would I do it to get some in-game currency for a casual game I play? Probably not. But that’s not to say that those who are more invested in the game, wouldn’t. I am but one man.

The Jun Group also reported that engagement for the opt-in video advertisements was higher than regular pre-roll ads. For all ad lengths it ranged between 2.8% to 4.5%. Pretty decent rates all things considered. Again though, we don’t know what was offered to the viewers in order to get them to interact with the ads.

Now, the 4.5% was for ads that were in the 30-60 second range.

But those ads only accounted for 7% of all of the video views in their study. Only 15 second videos provided less at 6% of the total ad views. So how accurate are those numbers then? Plus, if the incentives weren’t the same for all of the video advertisements, that is another variable that might skew the data, albeit unintentionally, of course.

Final Thoughts

So, is incentization of online video advertising the way of the future? It’s hard to say based on this research. On the surface, the numbers look simply amazing, almost, too good to be true. So then, can they truly be true? It’s hard to say. In my mind, there are too many other variables that don’t seem to be accounted for. The numbers are presented in a vacuum without taking into account anything else that might have affected the outcome. There’s no mention of where the ads were shown, what was offered for watching the ads, and how many times ads were seen by each person. On top of that, it’s just 7.7 million ads over a four month period when, in that same time period, 38.5 billion or more in-stream ads were seen the majority of which weren’t opt-in ads.

It almost seems like brands are getting so desperate to get their message across that they’re willing to pay consumers to watch the ad. That’s not exactly the case here, but it could be a slippery slope. If incentivization is indeed a major key to the future of online video advertising, are we then hurtling toward a day where all brands are paying consumers to view their ads?

Probably not, but we’re also probably not on a road where opt-in, incentivized video ads will overtake standard video advertising anytime soon either.

You can check out the full study and report here.


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