Online video advertising is bold, glamorous and hands down one of the fastest growing advertising formats in the world. In the UK alone, online video advertising grew in 2010 by a market beating 91 percent to reach an incredible £54 million (IAB / PwC Online AdSpend Study Full - Year 2010). To put this growth into perspective, only two years prior, online video was worth a mere £4 million in the first half of 2008.
Now, online video advertising sits at roughly a third of the value of cinema advertising in the UK and all indicators point to a continued explosion in growth. A recent survey of over 160 media buyers found that almost three quarters (72 percent) said they expected their online video advertising spend to increase by 25 percent before Q4 2011 (WebTVEnterprise: The UK Online Video Advertising Market - H1 2011).
Very quickly, we’ll witness online video advertising become the biggest audio visual advertising channel, second only to broadcast. Indeed, 11 percent of buyers are now allocating more than £100,000 for each of their online video campaigns. A small amount in comparison to broadcast budgets but significant enough to prove that brands are moving beyond the testing phase to see online video advertising as a core line item.
Audience growth
Many reasons exist for advertisers’ sudden interest in buying ad placements around online video. Of course, audience is top of this list. The online video audience is huge, with 26.9 million people in the UK watching video clips from both home and at work in April 2011 (UKOM / Nielsen).
The number of viewers, amount of video viewed and the time spent viewing is increasing. This is largely due to the fact that more websites are providing video, or placing more of an emphasis on existing video, than ever before. Consumers clearly have a huge appetite to view video online.
Branding versus response
The WebTVEnterprise report also clearly demonstrates why brands want to use online video advertising – forget clickthrough as the primary success measure, online video is about brand. Media agencies stated that advertisers' primary objectives for using online video advertising were incremental reach to broadcast (53 percent) and brand awareness (42 percent) while direct response featured in just 5% of respondents’ answers.
There’s good reason for this preference toward reach and branding for online video. Online video is a natural extension to broadcast advertising and the very nature of audio visual advertising lends itself to emotion and storytelling, perfectly suited to memorable brand advertising.
Don’t dismiss interaction and response just yet however. One of online video’s most underused strengths is its ability to extend the experience beyond the advert itself – something totally unique to online. On top of click through, some advertisers are already dipping their toes into a more engaging experience. Tippex’s interactive ad on YouTube is a well known viral example.
Adverts for the film Inception by Warner Bros and PHD, and an advert for Strongbow by Starcom and Tremor Media are two paid placements that used the IAB’s VPAID standard to add interactive options to watch additional video content. "Viewers of the Inception campaign will be able to interact by choosing alternative video content, which we hope will ultimately lead to a deeper level of engagement and purchase consideration,” said Camilla Day, head of digital buying and VOD at PHD.
Short video is as valuable as long video
Long form online video provided by broadcasters like ITV, Channel 4 and Sky is hugely valuable, premium content and always will be. But the online video advertising opportunities aren’t just for long programme and film content.
According to Yahoo!’s latest research, 70% of people in the UK watch short videos of less than five minutes in length every week (Yahoo! Shortcast 2011). A phenomenal figure backed up by similar audience statistics from UKOM (by Nielsen) and comScore.
IAB research in conjunction with Sky specifically investigating the effectiveness of online video advertising around short video clips proves that, contrary to industry myth, consumers are more than accepting of advertising around these shorter clips.
When asked how appropriate they felt advertising was around types of short content, consumers said advertising was most appropriate around entertainment clips (47 percent), sports highlights (40 percent), music videos (35 percent), news highlights (31 percent) and user generated content (17 percent), (IAB / Sky Video Ad Effectiveness 2010).
Advertising is therefore appropriate around short and long online video content. The main considerations are actually a recognised publisher brand, high quality video content, the type of content, the ratio of advertising to content (ie. long videos can handle more adverts, like in broadcast) and frequency of advert.
VAST & VPAID – the answer to unlocking budgets
In 2008, the IAB Video Council – the UK’s largest committee dedicated to online video advertising – identified the five biggest hurdles for publishers wishing to grow online video ad spend. Near the top of the list was reach, one of the main requirements from advertisers. After all, with a glossy, expensive video ad, it’s important that as many consumers see it as possible!
The IABs around the world have been working extremely hard with the industry over the last two years to tackle this issue. Two standards exist, VAST 2.0 (video ad serving template) and VPAID (video player ad interface definitions).
Without going into too much detail, these standards help bring simplicity and ease to the entire online video advertising process. The main beneficiaries are agencies and advertisers, but there are multiple benefits for publishers compliant with these standards, which include:
* Faster turnaround of campaigns for ad operations teams
* Simpler, standardised connection with third party ad servers and thus networks – unlocking the bigger budget, large scale campaigns
* Consistent and more detailed reporting across the industry to help agencies, advertisers and publishers to use online video more effectively
Measurement / UKOM
Perceived to be the biggest hurdle for the growth of online video advertising is audience measurement for planning purposes. While publishers do all have extremely good audience data themselves, advertisers demand impartial comparative data in order to plan.
In May 2011, UKOM, the industry approved audience planning currency for online media, launched its much anticipated video census product. This product, available now, offers data on video viewing in the UK by publisher as well as detailed demographic audience data.
The UKOM audience data is intentionally directly comparable to offline media currencies like BARB and RAJAR and can easily be fused by agencies to show extended reach. It’s important that all online video publishers understand this product.
Ad format effectiveness
The IAB & Sky Video Ad Effectiveness research also examined the recall levels of different online video ad executions, to identify which are most effective within branding campaigns. Pre-roll video used alongside companion banners were found to deliver the highest recall at 47 percent, capitalising on the anticipation and increased attention levels of the audience. This is compared to 44 percent who recalled the ad when only pre-roll was used, 43 percent with a branded video player, 37 percent for post-roll video ads and 36 percent recall with in-stream overlays.
Interestingly, brand recall levels were also seen to be higher in the workplace by 10 percent than in the home. This was due to people being more focussed at work with less time and fewer distractions, while at home, people are more likely to multitask. Clearly, reaching audiences at work with audio visual brand adverts is another unique online video attribute.
The future of online video
Having read this article, you may now be left with an overwhelming sense of hype around online video that poses the question, “is this too good to be true?” The answer is a blunt and exciting ‘no’; as incredible as online video’s growth has been to date, we’ve barely seen the tip of the iceberg yet. Evidence clearly shows that audiences, advertiser spend, publisher content investment and therefore quality and ad effectiveness will all continue to grow and improve over the years to come.
Hurdles that plagued online video’s early years (and it’s easy to forget online video has only really been feasible for less than a decade) like audience measurement, reach through networks and quality are falling away quickly. So quickly in fact, that by the end of 2011, these hurdles will no longer exist.
The IAB Video Council anticipates online video becoming one of the largest online ad formats over the next few years and looking toward the US online video ad market - expected to be near $2 billion in 2011 (eMarketer 2011) – it’s plain to see why.
Jargon buster
Online video: an umbrella term that covers any video delivered through the internet. This applies to all devices including desktop, mobile and TVs. It includes video-on-demand, video on websites and catch-up TV on broadcaster sites.
Online video advertising: is any advert placed in or around a piece of online video content, eg. pre-roll shown before a video or an interactive skin around the video player. An online video ad can also be the content itself, eg. a viral advert.
Long content / long form: any video over 5 minutes in length. Typically programmes and films.
Short content / short form: any video under 5 minutes in length, usually between 30 seconds and 3 minutes. Typically news, sport and entertainment clips, film trailers and music videos.
VAST 2.0 (Video Ad Serving Template): a global IAB standard to help consistency in reporting, ad serving and transparency.
VPAID (video player ad interface definitions): a global IAB standard that lets advertisers know exactly where ads are being placed, helps with interactive formats and detailed reporting.
