While banner ads are dying, video ads are growing.
Stefanie Berliant
Media Coordinator
Currently, studies are proving that online display ads are ineffective while other forms of online advertisements, such as video ads, are showing great promise. Most online users watch short-form videos, such as news clips, but as the growth of online long-form videos (TV episodes, Web-only shows, full-length movies, etc.) continues, it will create a vacuum for ad inventory space. The growth of online video advertising depends on the audience, the inventory and the content. There needs to be enough people to watch the ads, enough space to encourage marketers to buy the ads, and trusted, professional-quality video content.
According to MarketingSherpa, video ads, which receive a 49.5% response rate, are highly efficient and require minimal effort. Video ads allow advertisers to deliver more information about a product or service to a targeted audience, thus easing the conversion funnel from ignorance to purchase.
A report from eMarketer shows that in 2008, 66.8% of all Internet users have viewed some form of video advertising (in-stream, in-banner or in-text) at least once a month. They predict that this percentage will increase to 80.6% in 2012. eMarketer also projects that the number of people who view an online video ad will be 183.3 million in 2013, a large rise from the 129.5 million in 2008. The US online video ad spend in 2008 is $505 million and is expected to be $1,150 billion in 2013. eMarketer also estimates that while only 2% of total Internet ad spend will go to video in 2008, that share will be nearly 9.8% by the end of 2013.
According to a Bain and Company study, video ads generate more revenues. They found that while video CPM rates are approximately $43, or about three times higher than the $15 average CPM for display ads, companies can experience a 1.39% to 5.83% increase in direct sales for video ads than display ads. A recent study from The Diffusion Group estimates CPM rates will rise gradually through 2013.
DoubleClick conducted research that found that large sized, in-page video ads got a higher click through rate (.12%) versus non-video ads (.09%). Also, large sized, in-page video units got higher interaction rate (2.45%) than the non-video ads (1.30%). Additionally, expanding video units received higher expansion rates and times (2.18% and 9.37 seconds) than the non-video ads (1.85% and 6.63 seconds). Furthermore, in-page video ads had the highest video complete rate at 55%.
If publishers and ad networks want to capitalize on the profit that can be made form online video advertising, they need to offer more video content which can support more video ad inventory.
