Embracing the Online Video Ad - the Time Is Now

  |  January 23, 2013   |  Comments

As the mobile space continues to transition to shorter, more interactive experiences that offer rewards and incentives for engagement, marketers need to find new ways to offer greater value.

Whether you like it or not, the online video ad is here to stay. And to grow. There are ads before and during videos on Hulu; suddenly that video on YouTube has a :15 ad before it; even is getting in on the commercial action. While a :30 digital commercial before, or even during a TV show on Hulu is virtually no different than a commercial break on TV, it is a relatively new thing for most online users. The early days of YouTube, Hulu, and even Facebook were once ad-free. While these ads can be frustrating for someone just looking to watch a video on ESPN, commercials like these are quickly becoming the norm.

As the appetite for rich online media, and original online media, continues to thrive, so does the advertising supporting it. According to Forrester Research, almost $13 billion was spent on online advertising in 2012. Online video ad spending is expected to go from $3.5 billion in 2012 to $7.6 billion in 2017, overtaking text ad spending by 2014. If those numbers seem high, here is another one that might surprise you: based on comScore Video Metrix, in the United States alone, online video ads were viewed over 110 billion times in 2012; with the second half of the year seeing an increase of about 9 billion from the first half.

New Devices and Technology Are Driving Mobile Video Consumption

If we learned anything at CES (other than that Microsoft may have been the better choice for the keynote), it's that mobility and interaction are driving product design. The screens are getting sharper and brighter. The processors are getting faster. The devices themselves are becoming thinner and lighter. While this trend is nothing new, we are crossing a new threshold in the ability to consume video in an engaging experience.

Coupled with the new devices is the improvement in technology and bandwidth. The move away from Flash videos makes mobile video accessible to more audiences. Evolution of caching technology, video serving, and overall bandwidth availability means mobile videos are being delivered faster and with less interruption.

Time for Marketers to Step Up Their Games

Just as the electronics industry is evolving, the advertising and marketing industries must evolve with it. More people can access YouTube on their TVs, and more tablets and phones can access Hulu. Video services that were once relegated to the computer or laptop are available on-the-go or in the living room. It's because of services like these that online video ads have become the standout of the online advertising world.

The worlds of video production and online advertising are becoming invariably intertwined. According to Mashable, the time equivalent of 500 years of YouTube videos are watched every day via Facebook. That's a lot of videos - and a lot of ads. While this is the good news, there are certain trends that marketers need to keep in mind. Most importantly: the pre-roll is king.

Pre-rolls can come in several forms: 30 seconds, 15 seconds, skippable after 5 seconds, not skippable at all, etc. Based on a recent study by TubeMogul, while non-skippable :30 pre-roll commercials are the most hated form of online video advertising - even causing as many as one in six users to back off the page - they are very effective. And ad options or selectors, like the one you'll sometimes find on Hulu, are even more so.

As the mobile space continues to transition to shorter, more interactive experiences that offer rewards and incentives for engagement, agencies and marketers need to find new ways to tailor these experiences to offer greater value.

Big questions loom:

  • How can personalization happen within the video unit?
  • Who will be driving the production - the traditional agency, the digital agency, or some mashup of both?
  • What are the right metrics to evaluate the success of the digital video ad unit?
  • What types of interaction will users find most acceptable?

For marketers to find lasting success with video ads, they will need to find new ways to make them digestible, relevant, and cost-effective to produce and deliver, or consumers will start finding new ways to bypass them.

Video image on home page via Shutterstock.

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Andrea Fishman

Andrea Fishman, VP of strategy and a partner at BGT Partners, leads BGT's Chicago office and has extensive experience in marketing and management consulting. She and her team drive value to BGT's clients through the development of behavioral marketing programs, web analytics, measurement programs, industry benchmarking, competitive assessments, and the design of integrated marketing programs.

Andrea has been with BGT since 2003 and is credited with strengthening partnerships with such clients as ADT, Sony, ADP, and Avaya. Prior to joining BGT, she served as global vice president at divine, inc. She's also held strategic positions within marchFIRST, The Lewin Group, and the office of U.S. Sen. Edward Kennedy.

A graduate of Brandeis University, Fishman was awarded the Wasserman Scholarship for academic achievement and was named a 2010 Stevie Awards Finalist as Best Executive in a Service Business. She is a frequent judge for the eHealthcare Leadership Awards and is involved with the Special Olympics and Chicago Cares, a community service organization.

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