Online Video Advertising is on the Rise - But Why?
The latest survey from IAB/PWC on the state of internet ad spend in the UK revealed a rosy picture for online display advertising, and for online video advertising in particular.Online display advertising spend grew by 28% in 2010, driven in part by a 91% growth in video advertising.So why is online video advertising proving so popular? And can this growth be maintained?Well firstly, the online video audience is growing rapidly, driven by the range of Video-on-Demand (VOD) services offered by the major TV channels and the likes of SeeSaw, YouTube and MSN Video. The IAB estimates that from January to September 2010 there were 36.7m online video viewers, up from 30.3m in the same period in 2009. In September 2010 alone, 6.6 billion videos were viewed for 562m hours. And the VOD services haven't only increased the amount of video consumed online, they've changed what is being consumed - longer form content consumption is growing faster than shorter form.However, advertisers need to be aware of the nature of this market. The IAB's figures show a predominantly male audience - 2/3s of videos were viewed by men in September 2010 - and a young one too - almost 3/4s were viewed by those aged 44 or less. However, that's not to say that those looking for female or older audiences should rule it out - part of online video advertising's strength is its ability to reach specific, often hard to target, audiences.The second part of this growth story is online video's effectiveness. Research carried out by IAB and Sky found recall of online video ads to be as high as 79% (from pre-roll ads with companion banners) with click thru rates of up to 1.23% (for branded video players). Eyeblaster (MediaMind) research found that video advertising increased dwell rates and dwell times of viewers vs others forms on online advertising, both key metrics when it comes to increasing conversions from online advertising. In fact, research carried out by broadcasters indicated that advertising around long form content performed more strongly online then it did when broadcast on TV.Another factor in the increasingly popularity of this medium are the targeting options - video advertising offers all the targeting benefits associated with online channels. Depending on the type of advertising selected, video advertising can be targeted geographically, contextually, behaviourally, by time of day and by specific programming. Much of the appeal to advertisers is its ability to extend the reach of offline campaigns, particularly offline TV campaigns, to target audiences that are hard to reach offline.Given all these positives, it's not hard to see why emarketer is predicting that online video advertising will be rivalling banner advertising as the no.1 format by 2014.But the medium is embryonic and not without its growing pains. For example, the plethora of formats available can make it a difficult media to plan. Even the no.1 format, the pre-roll, is offered in standard, multiple ad selector or skippable formats, depending on the publisher.And many advertisers worry about the interruptive nature of the medium and that as it grows in popularity, so it will become an increasing annoyance. Not only do ad formats need to evolve to combat this but the way the medium is used too. At present, cut down versions of TV or cinema ads predominate - more bespoke creation of online video is required to create ads that are complementary to the content they are being consumed with rather than competing with it.However, these drawbacks shouldn't detract from the potential that online video advertising holds for brands, and premium and luxury brands in particular. Video advertising offers them the opportunity to tell more of their brand story - to showcase the quality of their products and the craftsmenship behind them. Even if for many, it's too early to commission video solely for online advertising, thought should be given to how other online video projects can be re-puposed to create this compelling form of online advertising.