Top 5 online video advertising trends

Brands are increasingly open to delivering their message directly to consumers. Viewers want to consume original and thought provoking content. In general, they do not care if the original publisher of that content is an independent artist, ad agency, brand, etc. One success story that immediately comes to mind is Dove.

Broadly speaking, native advertising (which is quickly gaining “buzzword” status) refers to showing viewers ads that seamlessly integrate into their current experience. In many ways, this is the exact opposite of a banner ad, which is prominently displayed to siphon the viewers’ attention from the content. An excellent example of a publisher who effectively uses native ads is Buzzfeed. A company called The Media Briefing, which bills itself as an “intelligence platform for the global media industry”, recently performed a study on the efficacy of Buzzfeed’s native ads. According to their study, on average Buzzfeed native ads received over 4,000 “social media interactions”. This includes things like likes, tweets, and plus ones.

In our opinion this highlights the power of native ads and was one of the determining factors for why we chose to include in our list. When advertising can be integrated this tightly into the content of a site, a seamless experience is delivered to viewers, which translates into higher engagement and click through rates. The marketplace is still deciding on the best way to translate Buzzfeed’s success directly into the world of video advertising. But rest assured that the day when you cannot tell if a piece of video is an ad or not is on the horizon.

The fact that a viewer can interact with an ad is one of the most salient advantages to advertising on television. A brand can have interactive videos, games, and other content. Adding interactivity is especially valuable if a brand wants to keep a viewer engaged for an extended period of time. This affords advertisers time to begin to build a relationship with potential customers. Indeed, while this advertising technique is still coming of age, studies have shown that interactive preroll ads outperform standard prerolls along very important metrics. These include message association, purchase intent, and brand lift.

Mobile, as an advertising medium, is often questioned. The screens are too small to deliver an interesting experience, people only use their phones to use a specific app (making them less susceptible to the distractions of advertisers), etc. Also on mobile it is difficult for advertisers to gather enough data to power the sophisticated retargeting schemes that are omnipresent in display and search advertising. However, advertisers cannot ignore the fact that the mobile video advertising landscape is huge. Indeed, roughly 10% of all global online video is delivered to a mobile device. The market is expected to continue on its aggressive growth trajectory. A key driver of this growth is that wireless networks are becoming powerful enough to reliably stream video to mobile devices, making video a widespread alternative to the oft lauded mobile banner ad. This is good news if you are a publisher or an advertiser. From a publish point of view, advertisers are willing to pay nearly twice as much for video ads over traditional banner ads. For advertisers video ads have been shown to increase click through rates by up to 27 times.

Not unlike what happened in financial markets in the recent past, machines are playing an increasingly large role in deciding when to buy and when to sell. However, instead of stocks or currencies, they are buying and selling video advertising inventory. Most major web publishers currently sell at least a portion of their inventory programmatically. In fact, by 2017, the amount of RTB (“real time bidding”) that is expected to occur online is expected to grow by roughly 50% to $9 billion dollars. The rise of programmatic buying is, at least partially, driven by a desire to serve the perfect ad at the perfect time.

Therefore, unlike in finance, the drive towards programmatic buying is generally seen as a positive, at least from the advertisers and publishers perspectives. The bidding algorithms being employed take advantage of vast troves of user data which inform what the correct ad to show is. This would be impossible to do in real time with a human salesperson. The increased automation has also resulted in the standardization of various ad buying processes, which has brought transparency and control to the online video ad marketplace.