Online Video Advertising: Not for Branding Only

Online video advertising’s effectiveness isn’t news to marketers. Many top advertisers have jumped into online video in a big way, causing something of an inventory shortage.

According to eMarketer, last year rich media and video advertising accounted for roughly $1.5 billion in spending, for 9 percent of total online ad spending. It’s projected to grow to $6.2 billion, or 17 percent of online advertising spending, by 2011. In other words, online video advertising will quadruple in five years.

What’s fueling this growth?

Online Video Delivers Branding Impact

Online video advertising outperforms other online formats for branding. Based on 106 campaigns, Dynamic Logic’s Q3 2006 MarketNorms data shows online video ads delivered a 6.1 percentage point improvement in aided brand awareness; a 18.1 percentage point improvement in online ad awareness; and a 9.3 percentage point improvement in message association.

Of course, not all ads are created equal. Across five branding attributes, Dynamic Logic found significant variation between the most and least memorable ads. Most-noticed ads were intrinsically linked to the brand, used online interactivity, and were synergistic with offline marketing. In contrast, least-noticed ads didn’t quickly establish relevance, weren’t clear about what was advertised, and relied on audio for message delivery.

Online Video Advertising Makes It Happen

Focusing on the interactivity associated with online video advertising, DoubleClick’s “Video Ad Benchmarks” study examines over 300 campaigns in 2006. Among the salient findings:

  • Higher ad interaction. About 8 percent of the video ads, on average, generated some form of user interaction with the ad unit, including expansion, video control buttons, custom interactions, and clicks. The most frequent action was ad replay (0.32 percent), which occurred more often than clicking through a standard JPG or GIF ad (0.10 percent).
  • Longer ad viewing. Video ads played about two-thirds of the way through on average, regardless of whether the unit was an expandable or standard video ad format. Most units were :30 spots.
  • More click-throughs. Online video ads had higher CTRs (define) (0.40-0.74 percent), about four times the rate for image ads (0.10-0.15 percent). Users were taken to the advertiser’s Web site or landing page. For DoubleClick Research Director Rick Bruner, this is important as it means online video advertising drives direct response activity.

About 90 percent of the units in this research were in-page rather than in-stream, highlighting context’s importance. Since these ads are highly visual, interactive elements on a text page, they tend to stand out, spurring more interactions.

Not for Branding Only

Online video advertising’s high CTRs indicate these units aren’t for branding only. They point to the growth of brand response advertising, an evolving form that blends the strengths of branding and direct response disciplines in one ad. Brand marketers benefit from such driving actions as building e-mail lists and downloads to enhance customer relationships. Direct marketers benefit from enhanced brand recognition, a factor many traditional direct marketers overlooked until recently.

Recommendations for tapping into the strength of online video interactivity while increasing branding impact include:

  • Enhance online video ad functionality. Offer viewers different types of interactive options. Test ideas that will have ongoing branding impact, such as wallpaper or mini-game downloads or signups for an e-mail list.
  • Frontload important messages in online videos. Since ads may only be watched partway through, keep the message short and make key points early.
  • Consider context when creating ad units. Think about how the ad will stand out on the page as well as what else viewers think about while your video plays. This provides ideas about how to attract readers’ attention and induce them to act.
  • Assess direct response impact. With online video advertising’s higher CTR, interactions can translate directly to sales. As a result, online video will lead to new versions of direct response advertising.

Assessing Online Video Advertising

As with any advertising campaign, results should be measured relative to marketing goals. Metrics to track include:

  • Impressions are the number of times the ad is viewed, regardless of whether the user watched the entire video or had other interactions with the unit.
  • Video viewing time tracks how much of the ad the average viewer saw.
  • Interactions can vary based on the campaign’s goals and other functionality. In addition to viewing an ad, for example, you may want users to download wallpaper, forward to a friend, or subscribe to an e-mail.
  • Branding impact can be measured using traditional metrics and surveys.

Think creatively about online video advertising. Consider how you can tap into video’s engagement to get prospects to spend more time with your brand. Be it branding or direct response, think about what interactions are most relevant to your goals and how this can help build relationships with prospects, customers, and the general public. Now’s the time to jump on the online video advertising bandwagon and take advantage of this new format’s higher level of responsiveness.

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