Figaro Digital: Online video advertising -- the new rules of engagement
September 30, 2011
Collective's latest bi-annual report into the online video advertising industry shows that the market is continuing to mature at a rapid pace, with increased campaign budgets marking progress.
The outlook for the industry remains strong: 62% of 140 media buyers surveyed say they expect their VoD (Video on-Demand) spend to grow by 25% or more over the next six months, as confidence among advertisers increases.
The engagement of viewers of online video advertising is a strong theme running throughout the report. Brand environment is still a key consideration for media buyers when they are placing online video advertising campaigns. 81% stated that context – where the brand messaging is aligned to the content it’s being placed around – was a key factor for their VoD campaigns. This compared to just 18% who said that if the target audience was engaged, they didn’t care which website an ad was running on.
When questioned about their primary measurement for judging an engaged viewer, 51% said view-through rates, the number of people who watch video ads in full, while 39% felt click-through rates were the most important consideration. Given VoD is largely used as a branding medium, it’s still rather alarming to see such a high number of media buyers are measuring engagement on click-through rates, but I expect this number to fall dramatically by next year as more advertisers track view-through rates and receive greater transparency about their ad placements.
Just 10% used unique user numbers, which is not a surprise, given the more advanced measuring tools available.
The report also shows that VoD is still being used mainly to provide incremental reach to TV advertising campaigns and increase brand awareness. 59% said that incremental reach was their primary objective – a 6% increase from the last report in March, while 37% said brand awareness.
Since the first industry benchmark report, published in September 2009, there have been key developments and a maturing of an industry showing increased confidence and purpose.
Budgets have risen. The first report revealed that a quarter of media buyers were spending between £25,000 and £50,000 on a video advertising campaign. The latest report shows 26% said they spend £75,000 or more on an average campaign.
69% of media buyers now dedicate at least half of their budgets to non-broadcaster platforms, a 23% increase from the survey 12 months ago and a 10% increase from the last bi-annual survey in March this year.
The first report in 2009 cited a lack of solid measurement as the main reason for cautious spending on online video advertising – at the time a third of respondents believed this was preventing brands allocating larger budgets. Fast forward two years and online video advertising is becoming more transparent than ever before, now with a defined set of engagement metrics including view-through rates and unique viewers.
As the online video market continues to evolve, the measurement of engaged viewers is going to become more sophisticated. For example, what is the level of engagement on a 30 second ad spot compared to a shorter 10 second ad? Does a shorter ad spot deliver higher engagement when a viewer is watching a shorter video clip? I’ll be exploring engagement much more deeply in future reports.
I’ve been watching this market evolve in the UK for five years now and feel we are at an exciting stage. There is no doubt that the audience consuming video online has reached a level which no advertiser can ignore.
By Jamie Estrin
General Manager of Collective UK
Go to Figaro Digital
