Are Online Video Ads the Wave of the Future?

Spurred on by the proliferation of broadband, video (user-generated as well as mainstream) has become the new rage on the Internet. Keeping with this trend, video ads are gaining substantial attention and are set to make an increasing impact on the online advertising market in the coming years.

In addition to being engaging, interactive, measurable, portable, and possibly viral, online video ads can deliver more product information to a specific targeted audience. A Bain and Company study found that video ads generate more revenues as companies can experience a 1.39 percent to 5.83 percent increase in direct sales from video ads than display ads. Another study by Google’s digital marketing firm DoubleClick found that large sized, in-page video ads got higher click through rates compared to non-video ads. Furthermore, the study found that large in-page video ads got higher interaction rate (2.45%) than the non-video ads (1.30%). Given all this, what does the future hold for online video ads?

Downsizing their earlier projections, eMarketer puts the US online video ad spend in 2008 at $505 million and expects it to nearly quadruple by 2011, reaching $1.9 billion. eMarketer also estimates that while only 2 percent of total Internet ad spend will go to video in 2008, that share will rise to nearly 10 percent by the end of 2013. According to David Hallerman, a senior analyst at eMarketer, the online video ads will really take off after 2011 when the distinction between television and Internet video will be so blurred that advertisers will start channelizing more of their marketing budgets towards the Internet medium. Hallerman also expects advertisers to begin rewarding users for watching online video ads. These could include coupons, games, content or ways to personalize the ads.

Types of on-line Video Ads

In-Stream Video Ads –The in-stream video ads are similar to the offline T.V. ads in the sense that they appear either before, after, during or in-between streaming video content. In-stream video ads are further classified as

  • Pre-Roll Ads – Ads that appear before the video starts

A Pre Roll ad before MSNBC’s News Video

  • Post-Roll Ads – Ads that appear at the end of the video

An example of a post roll video ad on YouTube

  • Mid-Roll Ads – Ads that appear in-between the video

An example of a mid roll video ad

  • Overlay Ads – These are ads that appear at the bottom of the screen when a video is playing. When a user clicks the ad, another video (ad) plays in the same window, overlaying the original video which is automatically paused. The user can close the ad anytime and return to the original paused video.

An Overlay Ad on YouTube

In-Banner Video Ads (Clickable and Playable Video Ads) – These are essentially video clips embedded within a banner. Ideal for targeting a large audience, in-banner video ads usually have play and pause controls and can be programmed to either autoplay or play on user input. While a lot of marketers embed T.V. spots, it is recommended that you produce material that is more targeted and interactive. In-banner videos have been known to draw more clicks than plain image and text banner ads.

We recently launched Hello campaign using this inventory and counting the response, users click more than banner images.

Another example of an In-banner Video Ad (Below)

In-Text Video Ads – These are video ads that are triggered when the user rolls his/her mouse over highlighted or double underlined words within the text of the web content. While they allow marketers the opportunity to deliver highly targeted video ads, users also benefit by receiving appropriate information on their topics or areas of interest.


Example of an In-text Video Ad

Some Best Practices for Online Video Advertising

Define the Purpose  Before starting off, it is important that you pinpoint what you want to achieve through the ad. For example, promoting brand awareness, increasing brand likeability or a particular call to action. This will then help you appropriately tailor the message and creative content.

Keep it Short – Considering the short attention spans of the online audience and the need to respect their time, it is important that you keep your video ad brief. Lending support to this is a recent study by eMarketer that found that the online video audience prefers shorter ads.

Add Authenticity – Try and make your ad look real and believable as people are somewhat tired of the packaged ads served offline.

Entertain – Make sure that your video ads are entertaining as marketing to today’s online generation is more about advertainments than andvertisements. Ads that work best are those that don’t look like ads all.

Engage – Make your ads interactive and try to get into a dialog with your audience, eliciting their feedback. Video contests and review, rating and sharing options are some very basic ways to install interactivity.

Target Precisely – The internet allows for more accurate user and media targeting and it is imperative that you make the most of it to better reach your target group. Have your ads placed next to contextually relevant content and choose the right sites based on demographics and psychographics.

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