Capitalizing On the Growth of Digital Video Advertising

September 18, 2014
AJ Casale, Director of Insights & Paid Media

This year, digital video ad spending in the U.S. is expected to increase by 56%, rising from $3.82 billion to $5.96 billion. And by 2018, that spend is expected to jump to $12.82 billion. According to comScore, in July 2014 alone, there were 190.3 million unique online video ad consumers.

Not only will the overall spend increase over the next few years, but so too will the share of spending on video advertising compared to other online ad formats. Last year, digital video accounted for 21.6% of total ad spending, compared to 55% for banner display ads. But by 2018, that gap will decrease significantly and video is expected to have 30.1% of the share compared to 37.8% for display, according to new figures from eMarketer.



The Benefits of Video Advertising

While all of these numbers sound great, it’s important to look at a few of the benefits of video advertising:

1. Effectiveness

Online video ads have proven to be effective – even more so than television advertising. In a survey of U.S. ad agency executives by BrightRoll, 75% stated that online video ads were equally or more effective than traditional television ads. The Interactive Advertising Bureau (IAB) conducted a study with Nielsen that showed that online video ads have a higher impact in key measurement categories – message recall (40% online vs. 20% TV), brand recall (50% online vs. 27% TV), and ad likeability (28% online vs. 17% TV).

2. Engagement

A key performance indicator of any ad campaign is engagement – are people actually engaging with or clicking on my ad? The click-through rates (CTR) on video are exponentially higher than other forms of media – 4.25% on desktop and 11.8% on mobile screens. This compares to an average display ad CTR of 0.1% on desktop and 0.35% on mobile. While the overall spend on video impressions may be higher than display, the return on that investment can be even greater.

3. Explanatory

Video advertising allows for a longer message (typically 15 or 30 seconds) to explain your issue and make a greater impact on viewers. This is helpful for complex policy issues that can’t be explained within a typical banner ad frame.

Cutting Through The Clutter

With over 190 million video views running a month, how can ads stand out? There are three components of an advertising plan that can help cut through that clutter:

1. Accurate Targeting

Research-based targeting can help focus on the key audience(s) that you need to reach and that will be most receptive to your message. By looking beyond just demographics and understanding the behavioral attributes of the audience, we can pinpoint the media they consume online and minimize wasted impressions.

2. Cross-Platform Integration

Video advertising should not be done in a silo. A cross-platform campaign that includes video, banner display, YouTube, and social media ads will extend the reach of the ad and allow us to reach the target audience at multiple touch points. After a target sees our video, we can also directly follow-up with them with display advertising that encourages them to complete the desired action.

3. Compelling Creative

Solid creative that includes research-based messaging told in a compelling manner goes a long way in breaking through to your target audience. Good creative will maintain the integrity of your message while speaking to your target audience in ways that strike a relevant chord.

Online video advertising can be an important component of any advertising campaign. And with solid targeting and compelling creative, it can be an efficient and effective tactic to communicate with your audience and achieve a good return on your investment.

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