Online Video Ads - The next wave of online marketing

Diaz Nesamoney, Founder and CEO, Jivox
Online video advertising is all the rage. With analysts like eMarketer and Forrester projecting tremendous growth in online video advertising it’s no wonder businesses, both small and large, are looking at video ads as the next wave of online marketing.

Online advertising as compared to its offline cousins like Radio, TV and Newspapers is attractive because of one single difference – it is measurable.

Businesses in general tend to advertise for two reasons – brand building and lead generation and often a mixture of both in each campaign. Lead generation using advertising on traditional channels like TV have been notoriously difficult to measure and track and therefore been challenging as marketing media. As one marketer once said I know 50 per cent of my marketing budget is wasted, I just don’t know which 50 per cent.

As any new advertising format emerges, the temptation for marketers is to use tried and tested metrics for measurement, however as we have seen in several cases, this doesn’t usually work and often leads to a lot of confusion and inability to tie marketing dollars to business results.

For example, early forms of search and display advertising focused a lot on impressions which was borrowed from the TV world but wasn’t a very effective way to measure ads online because as advertisers found out, the fact that an ad was displayed on a web page doesn’t mean an end user saw it. Similarly search and now increasingly display advertising is focused on measuring clicks rather than impressions which attempts to measure interest and intent of the user. Clicks don’t account for engagement, reach and frequency and so often a campaign with good click through rates ends up not delivering results because the clicks were an attempt by users to get rid of the ad rather than engage with it.

Video is a whole new world and presents some very interesting opportunities and unfortunately also some complexities for measuring effectiveness.

The first thing to consider is that video is not an alternate to search and display ads, in fact video can be delivered via search and can also be delivered via a display ad format (e.g. an IAB 300x250 ad unit) or as pre- and mid-rolls within video content. This means that trying to compare metrics on search with metrics on video is somewhat meaningless because increasingly video is also delivered via search.

Video does both brand building and lead generation

What is exciting about online video ads and needs to be factored in while measuring their effectiveness is that unlike other forms of online adverting, video is unique in its ability both to be a powerful branding tool like TV advertising has been but also a lead generation tool like most online advertising formats.

Measuring the success of online video ads should therefore look at factors like reach i.e. many people saw my video ad and what the quality and relevance of the audience was.

Most online video advertising today is sold on a CPM (cost per thousand impressions) basis for this reason. Impressions themselves are very valuable as a branding tool.

For example, on a page that shows both banner ads and video ads, studies have shown that video ads command a 2-5 times higher engagement and click-through rates for the video ad than banner ads that have the same size and placement as the video ads. The reason for this is actually simple and is the same reason why YouTube is so popular as a destination – people love video and will watch it even if it is an advertisement.

Branding Metrics

Unlike search advertising where only a small text box is seen in search results, video advertising has the ability to communicate a lot more than just the name of the business and what it does. Branding metrics tend to measure the frequency, reach and impact of the ad on its audience.

1) Ad Impressions: This metric borrowed from the world of display ads is useful to know how many people were exposed to the ad but often is an inaccurate measure of how many people saw the ad. Ad Views, mentioned below, is a more appropriate metric for video ads.

2) Ad Views: An ad view is a sufficiently long view of a video ad to ensure the message was delivered. Ad views should ideally be measured as entire ad views, though many publishers report anything more than 50 per cent as an ad view. Banner ads often simply count impressions. Unlike a banner ad that communicates a brief message the moment it is viewed, video ads often deliver the message in 15-30 seconds which is the length of a typical online video ad. Advertising services and publishers that can report video ad views are telling you exactly how many people actually saw the entire ad, not just the beginning or part of the ad, but the entire ad.

3) Ad Frequency: Ad frequency measures how often an individual sees a particular ad within a given period. Advertisers often want to cap frequency so as not to cause overexposure. On the other hand frequency is a necessary element of brand recall and therefore needs to be an important measure of most campaigns.

Engagement Metrics

Video ads have a significantly higher ability to convey audience engagement compared to search or banner ads. Here are some of the audience engagement metrics that can be tracked for online video ads:

1) Click-through-rate: This metric is popular and very easily measured and is the most basic form of an engagement metric.

2) Ad Replays: This metric reports back how many views of the ad resulted in replay of the ad. A replay of the ad usually indicates either the user is interested in the product or service being advertised and wants to see/hear about it again or, the ad was fun and engaging and so the user wants to see it again – this is an important metric of engagement.

3) Ad Pauses: An ad pause is reported when an ad is paused. This is an important metric, because it often indicates the user is engaged and is pausing the ad to view it after their current online activity (to be truly accurate a pause event should be recorded at the unpause).

4) Ad Listens: Most websites require video ads to be played with the sound turned off so as not to distract or annoy the user who likely came to the site for some other purpose than watching the ad. Video ads are usually set up to have the sound come back on either when a user mouses over the ad or clicks on the unmute button. Either activity indicates that the user saw enough of the ad to peak their interest to a point where they wanted to listen to the ad.

Most video ad services today don’t provide all of these metrics primarily due to limitations on publisher websites, however ad services have started capturing data that would lead to being able to present these metrics to advertisers.

Other Emerging Metrics

Video ads are also excellent vehicles for direct marketing and lead generation. Since many ads are now delivered as flash ads, ad services are now starting to add lead capture and other click-to-action features like email, chat, coupon downloads etc. All of which either directly capture leads or indicate the likelihood of interactions becoming leads.

Most click-to-action features require a small pop-up form to be filled with an email address or other information about the user so the advertiser can get in touch with them. The range of actions can also vary quite a bit, for example:

1) Email, SMS, IM, Chat
2) Click-to-call
3) Play a longer version of the ad (infomercial)
4) Coupon redemption

The click-to-action metrics are a lot more challenging to measure because it is an emerging area of video advertising and no standards have been developed yet.

Learn to Measure, Measure to Learn

In summary, online video advertising offers a fascinating array of opportunities to deliver value to advertisers and end users alike. Rather than getting caught up in a specific metric as the ultimate metrics, advertisers should try and match campaign objectives with the kinds of metrics that should be measured to determine effectiveness, Experimentation is key to learning and ultimate success with campaigns. Surprising results may show up that confound conventional wisdom. For advertisers used to traditional media with little ability to measure, online video is a gold mine of opportunity.