Online Video Advertising for Direct Marketers

In today’s presentation we’ll discuss online video advertising growth based on recentlyreleased studies and surveys.

Before we move into today’s discussion, I want to emphasize that we’re talking online video advertising, not content videos. Video advertising is often what you see at the beginning of a video, called pre-roll. Sometimes video ads are placed in the midst of a long-form content video and are called mid-roll. Those can be short—as little as 10 to 15 seconds. Post-roll videos are placed at the end of a longer video, and are also usually 10 to 15 seconds.  Online video ads are served by third party providers, such as Google, YouTube, Brightroll, LiveRail, AdapTV, Hulu, and others.

While it may be tempting to think no one watches these videos, the studies from Nielsen and the Interactive Advertising Bureau suggest otherwise. On average, people who are streaming video watch ads for 20 seconds with an average completion of 87 percent. Pre-roll ads at the beginning of videos average around an 80 percent completion rate. Mid-roll ads, in the midst of a video, experience completion rates of 89 to 99 percent depending on the length, and post-roll placements have completion rates exceeding 70 percent.

With the explosion of online video advertising acceptance and the number of views by web users, now is an opportune time for you to adapt proven direct response broadcast methods, and apply them to online video advertising.

The number of Americans watching online videos in April, based on ComScore studies, suggests that nearly 182 million Americans watched 38.8 billion online content videos, and the number of video ad views reached an all-time high in April of 13.3 billion views.

If the sheer number of online advertising videos weren’t enough to capture your interest, then consider what advertising agencies think about online video ads. A survey of U.S. advertising agency executives, conducted by BrightRoll a third party online video advertising platform, found that 75 percent said online video ads were equally or more effective than traditional TV. As if that weren’t convincing enough, 9 out of 10 also thought online video ads had equal or greater impact than display ads.

Because of the popularity of online video ads, eMarketer estimates video ad spending will grow more than 41 percent this year, reaching 4.1 billion dollars. So it’s no longer a question of if marketers will adopt online video advertising, but when. And direct marketers are strongly positioned to reap the benefit of online video advertising because of our understanding of how to generate response based on years of direct response broadcast advertising experience.

The BrightRoll survey reports that 45 percent of respondents consider targeting the most valuable aspect of video advertising. As direct marketers, we’ve always known the value of targeting. If there is any surprise to me, it’s that only 45 percent of advertising executives found targeting the most valuable.

As for the type of behavioral targeting, lifestyle is expected to be used by about one-third of the respondents.

In terms of advertising categories seeing the highest and lowest growth in media spending, online video is expected by 25 percent of those executives to see the highest growth, followed by 23 percent saying mobile video. This is a reminder that mobile must be factored into any production for video advertising.

Turning to what these respondents saw as having the lowest growth, you might be surprised to hear, as I was, that direct response was seen as having the lowest growth by one-third of these advertising executives. But as any of us who have been direct marketers for years, this isn’t really anything new, and it’s a reminder that most advertising executives simply don’t understand direct marketing.

An item that I find fascinating, as a long-time direct marketer, is that the metrics used by advertising executives to measure return on investment are limited to gross rating points, target rating points, and impressions.

When asked about the most important success metric, 37 percent said views followed by brand lift at 23 percent.

But the metrics that we as direct marketers would rank the highest were ranked lowest by the advertising executives. Those included sales impact, click through rate, and ultimately, conversion.

Bottom line, as direct marketers, we think differently. We look at conversions and sales. And that, my direct marketing colleagues, is what separates the effectiveness of your online video ads from all others.

For direct marketers, who know how to create response-driven campaigns, this suggests that the timing may be right for you to test online video advertising. With so many video ads created only for branding, we think there is an opportunity to create online video ads that produce trackable opt-in leads or sales.

In our next blog, we’ll dive into some of the best practices for creating a successful direct response broadcast ad, and relate how you can apply those proven techniques to online video advertising.



Gary Hennerberg

After a lot of years in marketing and sales, this is what I know works:

Stories sell. Think unique. Stimulate emotion. Close deals. And here are a few other gems from my new book, “Crack the Customer Mind Code.” Know the persona, interpret your offer and let your prospect give themselves permission to buy. That’s how the brain is wired. It’s how people think.

What else? When I’m not breaking down complex topics (or ones marketers over-complicate) into easy-to-grasp stories that sell, I crunch numbers. Manage projects. Write. Teach. Lead.