In 1895 the Lumiere brothers played one of the first videos in history. The film, lasting only 50 seconds, showed a train arriving to the train station at La Ciotat, a serene town in southern France. When the film was first publicly shown, the audience was so overwhelmed by the moving image of a life-size train advancing directly towards them that they rushed to the back of the room, trying to avoid being run over.
Nearly 115 years later, audiences respond more mildly to moving pictures; nevertheless, video has remained one of the most engaging forms of media. Video is now the fastest growing sector of internet advertising, with the Internet Advertising Bureau revealing that digital video generated $477 million in the first half of 2009 – a 38% increase year-on-year. Few years ago, Jim Stengel, ex-CMO of P&G said:
In 1965, 80% of 18-49 year-olds in the US could be reached with three 60-second TV spots. In 2002, it required 117 prime-time commercials to do the same.
With the dominant $5 billion online advertising market of search expected to grow only marginally, advertisers are looking to video as the major growth sector for the next five years.
The Web is fulfilling this promise of being a medium where you can enjoy video as much as you can see it on TV. The difference online is, if you want to do something with it — share it, stick it on a blog, post it on a Facebook page, or mark it and save it — you can do all that. And that was never possible before.
Online video advertising spending in the US is projected to grow from $1.1 billion in 2009 to $4.1 billion in 2013 – quadrupling in four years. But digital media buyers may want to think twice about where they place online video ads. While Nielsen Online recently released data showing that time spent watching videos on social networks has risen almost 100% in the year to October, 2009, according to a wide-ranging report produced by third-party ad server Eyeblaster – which examined data from thousands of campaigns it executed for brands over the past year – has shown that social environments aren’t necessarily the best for video advertising.
Key highlights from the video report include:
- In-Stream video ads have the highest proportion of ads fully played compared to any other format.
- Creative decisions play a significant role in ad performance: Rollover user-initiated video performs best followed by auto-initiated video; click user-initiated performs worst.
- Weekdays from 9 am to 5 pm is users’ preferred time to watch In-Banner and Floating video ads.
- Relatively few users un-mute video ads; auto-initiated video has the highest un-mute rate.
- An increase of video length by five seconds reduces Video Fully Played rate by 2.8%, on average.
In fact, Eyeblaster focused on two metrics:
- Dwell Rate, which measures the proportion of ad impressions resulting in users engaging with an ad, such as mousing over or clicking on them
- Dwell Time, which measures the amount of time users spend engaged with a particular ad.
They found that overall, online video boosts both Dwell Rate and Dwell Time when compared to other forms of online advertising. However, online video tends to perform better when adjacent to content or email than in social media and gaming environments—both areas of high interest to advertisers.
Ariel Geifman, research analyst at Eyeblaster, said the company was somewhat surprised by their findings.
What we found is that people browse social networks really quickly. People spend a lot of time in social networks, but it’s not on the same Web page. People don’t browse as they do in news and finance, where they read an article and have more time to look at an ad.
Users may log in and out multiple times per day, or browse between pages more quickly. As a result, the performance of video ads in these environments is inferior as compared to other environments.
But given the popularity of websites such as Twitter, Facebook, MySpace and Linkedin, many large and small business owners are exploring the various options for advertising on social networking sites. While social media presents an opportunity for ads, it’s been difficult to measure ad effectiveness when the social media audience is so fragmented. It may not be as effective as hoped. Social media Marketing (vs. Advertising) seems to have more success within all size and type of companies, whereas the main difference between social network advertising and social network marketing is their ability to interact and engage with, and receive feedback from potential and devoted clients.
So should brands pull their online video ad dollars from social environments and stick to content? No, says Geifman. Rather, they need to consider users’ attitudes and behavior when running video ads in different environments, and adjust accordingly — ideally with custom ads. “Video is still a very much emerging medium,” said Geifman. “It is changing as we speak. This is a picture of video right now. People will find ways of engaging people in different environments . . . they need to make adjustments.”
The jury is still out as to which is the more effective method. Only time will tell.