Video Ad Networks Embrace Retargeting

Video ad retargeting is emerging as a new way for direct response advertisers to leverage in-stream video advertising. Still largely nascent, the practice is showing signs of wider use by ad buyers as a means of recapturing leads and boosting ad effectiveness.

As one might gather from the name, video retargeting is a variation of display ad retargeting – a practice frequently used by online retailers and other direct marketers to deliver ads to shopping cart abandoners and other non-converting site visitors while they’re surfing other properties.

A subcategory of behavioral targeting, retargeting is common on large ad networks and exchanges such as ValueClick, Advertising.com and Right Media. But it hasn’t been widely offered by video ad networks.

Until recently, that is. A growing number of video ad networks have lately rolled out the capability. They include YuMe, Tremor Media, and SpotXchange. Google does not yet offer retargeting on its in-stream video ad network, but an exec told ClickZ that it may do so in 2010.

Interactive agency Booyah has begun using retargeted video ads to bolster its search and display media buys for clients like Domino’s and Dish Network. The agency works with SpotXchange, its sister company, to manage those buys.

“Our video buys are heavy retargeting, like three-quarters-plus,” said Troy Lerner, CEO of Booyah. “And that matches how we treat display media. Most of our display is retargeted.”

According to SpotXchange, video ad retargeting has substantially lifted conversion rates for pre-roll ad campaigns that use it. In one campaign selling an unnamed subscription product, retargeting converted 900 percent better than untargeted run of network ads. The run of network ads converted one person for every 72,000 impressions, while retargeted pre-roll ads converted one for every 8,000 impressions.

For another client in the travel sector, SpotXchange said a campaign that used retargeting in combination with geotargeting saw a 3.4 percent click-through rate, compared with a .98 percent for ads that were only geotargeted.

Not all video retargeting offerings resemble one another. Tremor Media provides retargeting for in-stream ads, but it can also retarget using other formats – such as video ads in banner units – after exposure to an in-stream ad. SpotXchange works in a similar manner.

“Most marketers are using in-stream for branding and therefore there’s more demand for audience targeting than retargeting when it comes to in-stream,” noted a Tremor rep.

Another video ad network, YuMe, said demand for its own retargeting solution has increased. But it too acknowledges the bulk of its customers are brand advertisers. Less than 10 percent are direct response marketers, it said. (Brand advertisers generally don’t care about retargeting since they’re not driven by short-term goals to convert prospects.)

Jill Groebl, VP of digital marketing at Kansas City-based MMG Worldwide, said retargeting has helped her travel-focused agency increase interaction rates with video ads. MMG is more video focused than many agencies, with 15 to 20 percent of its spending going to the channel. Clients include Colorado Tourism, Barbados Tourism, and Holiday Inn.

Groebl has been pleased with the retargeting abilities of SpotXchange. She said one of the benefits of SpotXchange is its “detargeting” capability – that is, setting frequency caps to avoid serving retargeted ads to individuals who are not converting.

“The retargeting that we have done has been extremely beneficial,” she said. “Just to look at some recent numbers, we’ve seen anywhere from 5 to 10 percent increases in interaction rates.”

One downside to video retargeting is that it’s tough to achieve much reach – since a marketer is only able to identify a subset of visitors to his or her own Web site.

“That’s the bummer about it today. The reach is not humongous yet,” said Booyah’s Lerner.