8) Video Advertising Basics

8) Video Advertising Basics

Drs. Harsha Ganga & Chris J. Vargo

Display advertising types

• Video
• Banner ads
• Rich media
• Sponsorships
Although the lines among all four advertising formats in the digital world are increasingly getting
blurred, there are some differences.

How is it different from other display

formats?
Display advertising is essentially all the static and multimedia content you see online. Whether
it’s in YouTube videos, streaming content like Hulu, in your newsfeed on Twitter and Facebook, on
Snapchat, on the New York Times online, or even those highly addictive recipe videos from Tasty.

Just as a side note, an emerging trend in digital display advertising is the sponsorship of video content
by brands. Brands are increasingly sponsoring video content online rather than placing ads within
creative or non-commercial content. You have probably seen the Tasty food videos on Facebook and
Instagram that are immensely popular. They attract billions of views online and they have one of the
highest levels of user engagement in the form of likes or comments. Brands can sometimes sponsor
such videos and have their products displayed in them. You will learn more about sponsored content
later on.

What is video advertising?

For now, let’s better understand video advertising and compare/contrast it with banner and rich media
ads.

Strictly speaking, video advertising consists of all formats of audio-visual content that appears
before, during, or after the streamed content (i.e., pre-roll, mid-roll, post-roll video ads). While
video ads on TV typically take the format of either 30-second or 15-second commercials, in the digital
realm, they can be any length or format. Advertisers have experimented with some creative formats
and lengths when it comes to video ads online.

Banner ads and rich media advertising

Banner ads and rich media advertising, on the other hand, involve static or multimedia ads that are not
embedded in a video player and are not part of streamed content. Want to check out banner ads for a
specific brand, check out moat.com’s realtime library

Banner ads for Netflix from moat.com. Netflix is constantly releasing new banner ads.

While some industry experts consider banner ads as one type of rich media advertising because
banners are increasingly featuring videos, the main difference between video advertising and rich
media and banner advertising is that videos are embedded in a video player and both rich media and
banner ads are outside of a video player. As long as they are outside of a video player, they are
considered banner or rich media content.

This, in essence, is the main difference between video and display ads.

Video advertising facts and trends

Pre-roll
The majority of online video is now pre-roll video. That is, the video you see before the one you want to
see. Pre-roll is short, anywhere from 3-30 seconds with a median of 6 seconds. These ads really can
only get one or two key points across. Here’s a recent Xfinity pre-roll series that does a good job of
hitting one idea home: https://adage.com/creativity/work/data-dollars/54217

Video advertising revenue

The video advertising market is the fourth biggest market within Digital Advertising, with a worldwide
revenue of $30.3 billion (USD) in 2018. This is expected to grow to $52.0 billion by 2023.

Video vs. television vs. reading

In addition to people preferring to watch videos online to television, people also prefer watching
videos (online or on television) in comparison to reading. Needless to say, video online is a growing
market.

According to Google, 6 out of 10 people would rather watch videos online than on television, and the
number of people who consume videos on mobile devices is growing at a rate of 100% every year. In
other words - it’s doubling every year.

Human psychology research suggests that people prefer watching videos in comparison to reading
text. Passive consumption of video content takes a lot less cognitive effort than active reading of text.

It is not surprising at all that consumers want to see more video content from brands. Hubspot claims
that 85% of consumers actually want to see more video content from brands.

9) Advantages and Disadvantages of Video

Advertising
9) Advantages and Disadvantages of Video Advertising

Drs. Harsha Ganga & Chris J. Vargo

The many advantages of video advertising

Video advertising has many advantages. In no particular order, here are a few:

Storytelling aspects
Video ads can be made highly engaging and memorable with storytelling aspects. As I mentioned
earlier, research shows that human beings tend to prefer video content that they can consume
passively, and the highly entertaining aspects of video ads make them one of the most popular formats
in the digital realm.

Generating interest
Next, video ads are great for generating interest in your product or brand and they fall in the
exposure/awareness/interest areas of the advertising funnel. You will recall that the advertising funnel
essentially has three broad phases:

Cognitive: deals with awareness and knowledge.

Affective: deals with preference, liking and interest.

Behavioral: deals with the ultimate purchase or some sort of behavior exhibited by the consumers.

Traditionally, video ads on television work well with both the cognitive and affective phases of the
advertising funnel. In that sense, they are a bit further from the purchase end of the funnel, but very
important in the consumer decision-making process. This is very important because research shows
that viewers retain almost 95% of the message when they watch it in a video compared to only 10%
when reading it in text. This gives video advertising a huge advantage over text-only formats, like
search advertising.

In the digital world, video ads have been shown to be great with the behavioral phase as well,
especially when they are featured on social media. However, given that for an ad to be called video
advertising, it has to be embedded within a video player, their presence is more of an interruption to
users who have a different primary task of consuming something else (e.g., the next episode of The
Handmaid's Tale on Hulu). This aspect makes them a little less effective with purchases and behavior
but more effective in increasing awareness and interest in your products.

Tracking and measuring

Like all or most digital ads, video ads can also be tracked and measured in terms of impressions, click
through rates, return on ad spend, and return on investment.

Shareability
Another great advantage of video advertising is that it’s shareable unlike, for instance, search
advertising. According to Wordstream, 92% of users watching videos on mobile devices will share it
with others; be it through social media or messaging services like WhatsApp. This aspect of video
makes it possible for video ads or brands with video ads to go viral.

Lots of info, short amount of time

Another advantage of video advertising is that this format can convey a lot of information in a short
amount of time.

Bottom line
Ultimately, what any business is interested in is the bottom line. This can be sales or attaining an
advertising objective. Videos have been shown to impact bottom line metrics by having a positive
effect on many of the ad effectiveness measures. For instance, video ads on a landing page can boost
conversion rates up to 80%. Similarly, video ads increase organic search traffic on a website by 157%,
and a website is 53 times more likely to reach the front page of Google search results (SERP) if it
includes video. The list of positive effects of videos goes on with increases in lead generation,
conversion rates, organic search results, and return on ad spend.

But there are disadvantages as well

Unfortunately, video advertising has some disadvantages. Like:

Disruptive
Perhaps the biggest disadvantage is that they tend to be interruptive in nature. As I had talked about
them earlier, they are often embedded in video players and prevent users from consuming the main
content they are actually interested in. Interrupting viewers with pre-roll and mid-roll ads might even
cause them to be irritated in addition to just clicking “skip ad.” And research shows that consumers
develop negative feelings towards the brands in the ads if the “skip ad” feature is not made available to
them and they are forced to view an ad.

Cost
Next, video ads are expensive. This is mostly because the time/space online is limited as there are only
two or three spots (pre-roll, mid-roll, and post-roll) in a typical video online to begin with. Given that
video ads require professional production, they tend to be expensive to make as well. This high cost
also translates to a higher cost per click. In fact, video advertising has one of the highest cost-per-click
in digital advertising. There are disruptors in the space that are trying to reduce the cost of video
advertising. For instance, Bouder’s own Brandzooka.com specializes in video advertising on small
business budgets.

Shelf life
Just as with search advertising, video ads also have a shorter shelf life, especially if users skip right
through them. Once skipped, they are gone and don’t tend to hang around like a banner ad on a page.

Viewability & Brand Safety

In addition, advertisers have little control over where their video ads are placed once they send them
off to an ad network. You will learn about how the placement works automatically in a later module on
programmatic advertising, but the gist of it is that advertisers have little control (or have to pay a
premium to get more control) over where their ads are placed in an ideal spot on the page. After all, if a
video ad plays, and the user isn’t looking at that part of the page, or if the video is only partly on that
page, it’s unlikely they’ll get anything from it.

What’s even more problematic is that video ads, especially pre-roll, often air before controversial,
negative, or unethical content. Some brands have had to pull their ads from various ad networks for
being featured in controversial content as pre-roll or mid-rolls.

Saturation
Lastly, there’s just too much of it online. Just as videos online are increasing in number, so are video
ads. This creates a lot of clutter and annoyance to consumers.

The future of video ads

Here are a few things to expect in terms of the future of video advertising:
First, fueled by the growth in mobile technologies, video advertising is expected to continue growing in
the foreseeable future.

Second, programmatic advertising, which you will learn about in the later modules in this course, will
play a bigger role in the future of video ads.

Third, newer formats like live broadcasting, 360-degree panoramas, and virtual reality will bring a
concept called immersion to video ads and make them incredibly attractive. It would create much
more involvement and engagement in the ads.

Finally, the proliferation of artificial intelligence will usher in an era of contextual or highly personalized
video ads, which will be delivered real-time making digital advertising highly attractive to small and big
businesses.

10) Banner Advertising and Rich Media

10) Banner Advertising and Rich Media

Drs. Harsha Ganga & Chris J. Vargo

What is banner advertising?

In simplest terms, banner ads are any advertisement displayed on a webpage.

How is it different from rich media

advertising?
Banner ads might make you think of static billboards at the top of the pages online, but banner ads
have come a long way since the early days of internet advertising. Although online ads have been
featured on the web since the beginning, credit for the very first banner ad goes to Hotwired, who
placed the web’s first banner ad on Oct 27, 1994.

Today, banner ads are ubiquitous and include all shapes and sizes. While banner ads initially were
static and contained an image and/or text, banner ads today can be animated or even take a video
format. When the standard banner ad includes an audio-video aspect to it, it is termed as rich
media advertising.

The main difference between video advertising and rich media ads is that the former is always
embedded within a video player whereas the latter is presented outside of a video player.

Rich media and banner advertising current

and future stats
According to eMarketer, in comparison to video advertising, the market size of both banner and rich
media advertising is a little over $30 billion US dollars. This amount is expected to increase to over $45
billion US dollars by the year 2023.

Advantages of rich media and banner ads

Banner and rich media ads have many advantages. Let’s look at a few of them:

Banner ads are significantly less expensive than search

advertising
The average cost per click (CPC) in the US in 2018 for search ads in the consumer service category is
$6.40 compared to the average cost of banner ad in the same category, which is 81 cents. In fact, the
average cost per click is higher for search ads in all of the categories considered by WordStream than
the average CPC for banner ads.

Measurable and scalable

Similar to other digital advertising formats, banner and rich media ads are highly measurable and
trackable.

Can carry all the advantages of video ads

Since rich media ads include audio and video, all the advantages we discussed in relation to video
advertising also hold true for rich media ads: More precisely, they are highly engaging and
memorable.They are great for generating interest in your product or brand. And viewers tend to retain
almost 95% of video messages.

Can influence behavior (advertising funnel)

Similar to video ads, rich media and banner ads also fall in the cognitive and affective phases of the
advertising funnel. However, given that they are not tied to video players and that they don’t appear
within the context of another video (as pre-roll or mid-roll), they have the added benefit of being able
to influence the behavioral phase of the advertising funnel a bit more than video ads.

For instance, rich media ads presented in social media feeds can be highly effective influencing
purchases. I know I am guilty of buying a pair or two of shoes after seeing rich media ads for shoes on
sale.

Disadvantages of rich media and banner

ads
Let’s now look at some disadvantages of rich media and banner ads:

Banner and rich media ads are less effective than search
advertising
Based on average click through rates, banner ads are significantly less effective than search
advertising.

For instance, the average click through rate for search ads in the travel and hospitality category is 4.68
compared to banner ads .47. This difference in CTRs jumps even higher for certain categories like
dating and personal ads. In fact, banner ads underperform in terms of click through rates in pretty
much all of the categories considered by WordStream.

Technological issues
Rich media and banner ads often require users to have certain browser plug-ins to be able to be
displayed well. In addition, a good portion of users have ad blockers which can easily block and
prevent banner and rich media ads, especially in pop up format, from being displayed at all.

Banner and rich media ad placements are highly complex

involving many players
Next, the rich media and banner ad placements involve many players—ad networks, publishers,
agencies, clients, production houses, technology vendors, DSPs, DMPs, and SSPs—making it a highly
complex advertising environment. Luckily, the programmatic modules of this course will cover many of
these players and the intricacies of digital advertising in general in greater detail.

The future of rich media

Programmatic and artificial intelligence

When it comes to the future of rich media advertising, much similar to video advertising, programmatic
and artificial intelligence will play a huge role in the future of this advertising format as well.

Ad and pop up blockers

Ad and pop up blockers will continue to be a huge threat to the future of banner and rich media
advertising. Unless the quality and relevance of banner and rich media ads improves drastically, ad
blockers can cause a serious damage to future ad revenues in this format. While Google has talked
about making certain types of ad blockers defunct on Google Chrome, Safari and its parent company
Apple seem more dedicated than ever to limit ad technology. It’s safe to say that ad blockers are here
to stay.
Rich media on mobile will increase complexity and
efficiency
As more and more people shift to mobile forms of being online, rich media and banner ads will have to
adapt to that environment. With this, both banner ads and rich media will reach a new level of
complexity and efficiency.