Video ads are everywhere — on online videos, popping up over articles on your favorite websites, or appearing on your social networks — and if you think they’re annoying, you’re not alone. While online advertising (thankfully) has improved since 2012, an Edelman Berland survey (PDF) found that users found ads “annoying,” “distracting,” “invasive,” “creepy,” and “evil,” and most users would still agree that “advertisements should tell a unique story, not just try to sell,” “beautiful advertising is more effective,” and some even found that “online advertising is creepy and stalks you” or possibly that “most marketing is a bunch of B.S.” (to which 53 percent of the survey’s respondents agreed).
While consumers often don’t enjoy online video ads, their popularity among advertisers and ad networks is climbing, though it’s not likely to replace TV ads just yet. In June, market research firm eMarketer reported that while spending on digital video ads is growing, its momentum isn’t nearly strong enough to see it overtaking the TV ad market in the near future. Spending on TV ads is projected to constitute six times the spending on digital video ads in 2018, in part because digital viewers are harder for advertisers to target given that they’re spread out over a wide variety of platforms.
EMarketer analyst David Hallerman noted that much of the time that users spend with digital video isn’t useful to advertisers, partly because some of that time is spent viewing clips that are too short, or otherwise not conducive to a brand placing an ad that can effectively tell its story. Alternately, users’ time spent with online video goes to streaming video through subscription services like Netflix or Amazon Prime Video, which don’t support advertising.
But the eMarketer report does find that spending on online video ads for desktop remains well ahead of spending for similar ads targeted to smartphones or tablets, and spending on desktop ads is expected to comprise 75.8 percent of digital video ad spending in 2014.
Why Video Ads Are Annoying
It’s a pretty universal consensus among Internet users that online video ads are annoying. But exactly what makes them so annoying? While it provided a somewhat less than scientific analysis, a Slate piece (first published all the way back in 2008, no less) rather comprehensively encapsulated users’ frustrations with video ads: they can be repetitive, as platforms show the same user the same video multiple times, sometimes even on the same piece of content or on the same visit; they can be poorly targeted, with sites failing to account for users’ tastes and interests; and they often fail to take advantage of the wide room for creativity that the Internet allows. That’s not even taking into account the fact that video ads often abruptly interrupt users who are looking to watch or read a specific piece of content.
While targeting has certainly improved since that piece was published (and the web is no longer considered a “new medium” for advertisers, as writer Farhad Manjoo called it in that piece), users still make largely the same complaints about the ads that show up before their YouTube videos or now on their Facebook News Feeds. Manjoo wrote at the time that it isn’t “important” how many people see your ad, but how many people like your ad — how many people discuss it and share it with others. By that standard, many advertisers are still failing, despite the fact that video ads constituted 38.1 percent of total online video consumption in March 2014, up from 20.5 percent in April 2012 and 9.8 percent in July 2010, as reported by Statista.
Consumers also cite problems with video ads that now pop up on their mobile devices. An April report by eMarketer compiled data on a variety of those frustrations. While 44.4 percent of smartphone or tablet users say that they would happily (or begrudgingly) watch a video ad in order to subsequently watch premium content for free, only 12 percent of U.S. mobile device owners said that video ads were their preferred format for mobile ads. More consumers favored banner ads — which are easily ignored and often cited as ineffective for advertisers — while the highest number favored coupons, which provide a more obvious and immediate benefit to the viewer.
Additionally, mobile video ads are data-intensive, and when users aren’t on WiFi, the ad counts against the monthly limit on the data plan they purchase from their provider. A significant number of users report that long loading and buffering times are also a frustration. Most users solve that problem by only watching videos when their smartphone or tablet is connected to WiFi, pointing to the possibility of limiting video ads to WiFi-connected devices as a worthwhile consideration for advertisers.
A survey by market research firm Ask Your Target Market found in 2013 that traditional TV commercials are considered more effective than online video ads among consumers, with only 5 percent of online video viewers reporting that they always pay attention to the ads that play before or during an online video. While 14 percent said that they pay attention most of the time and 22 percent said that they pay attention about half of the time, a full 41 percent said that they rarely pay attention to online video ads and 18 percent said that they never do.
Those numbers are surprisingly similar to what consumers report regarding TV commercials — 6 percent of TV viewers say that they always pay attention to commercials, 15 percent pay attention most of the time, 30 percent pay attention half of the time, 40 percent rarely pay attention, and 12 percent never pay attention — only 8 percent of survey respondents said that online video ads are more effective than TV ads. Thirty-five percent said that they think TV ads are more effective than online video ads, and 25 percent think the two are equally effective. (An additional 32 percent had no opinion on the matter.)
But despite advertisers’ targeting problems, users don’t want to pay extra to simply avoid the problem. In July, Advanced Television reported that research by STRATA found that the majority of consumers would not pay a premium to avoid online video ads, with only 18 percent of survey respondents saying that they would pay to avoid ads. Despite that, users complained that online video ads were both invasive and annoying, particularly among younger audiences. Younger users were slightly more willing to pay a premium than older users, and more likely to say that targeted ads are more invasive than non-targeted ads.
Additionally, younger users found online video ads more annoying than TV ads, and 90 percent reported seeing incorrectly targeted ads at least some of the time. Users said that they skip ads because they’re shown the same ad more than once or the ad is poorly targeted, with only 10 percent of users reporting that ads are always or usually targeted correctly. However, the STRATA research found that users will voluntarily watch online video ads when ads were funny (51 percent of users), when the ad targeted their interests (31 percent), or when the ad was educational or informative (3o percent), and it’s those video ads that demonstrate how video ads, despite the challenges, can actually prove effective.
Why Video Ads Are Effective
Ad targeting technology is constantly improving, with advertisers now using tools that let them decide which users to show a specific ad based on the type of the device they’re using, their location, the type of content they’re viewing, and their behavioral history. Video advertising platform Videology noted in its second-quarter report (PDF) on the video advertising market that 36 percent of the ads on its platform during the quarter were targeted based on user behavior, 26 percent by domain, 26 percent geographically, and 4 percent contextually, with a 16 percent increase in behaviorally marketed ads quarter-over-quarter, demonstrating that advertisers are working to make sure that they’re showing ads to an audience who will consider them relevant.
VentureBeat recently reported on research by AdColony — a provider of video ads for app developers — which rather unsurprisingly found that developers cite video ads as the top method of acquiring new users. Fewer than 25 percent of the developers surveyed considered banner ads to be the most effective advertising strategy to acquire users, and 96 percent of developers say that user quality is the number one factor in evaluating how effective an ad campaign is.
Conversely, the volume of installs that an ad campaign generates was cited as the least important consideration in evaluating a campaign, and 43 percent of respondents report being most excited about to use video ads in 2015, followed by 41 percent who are excited about the potential of social ads to drive user acquisition.
A study by a researcher at the University of Massachusetts at Amherst looked at the rate at which users watch an entire video ad as a measure of effectiveness. Ramesh Sitaraman analyzed anonymized viewer data for more than 257 million ads in 367 million videos by more than 3,000 publishers, and viewed by 65 million viewers globally. He found that the position that an ad is placed within the video that a user is watching had a significant impact on how many viewers watched the entire ad.
Ads in the middle of a video reached a completion rate of 97 percent, while ads at the beginning of a video reached a 74 percent completion rate, and ads at the end of a video reached only a 45 percent completion rate. Those results are pretty easy to understand: most viewers think that video ads are annoying, but tolerate them in order to watch the content that they wanted to see. Viewers were also more likely to watch ads inserted into long-form content, like a movie or a TV show, and slow loading times on pre-roll videos caused many users to abandon a video without watching it.
While some users do choose to abandon a video instead of watching an ad, users are often more engaged in online video ads than in comparable TV ads. Research in 2013 by IPG Media Lab, reported by Yashi, found that online video ad recall is two times higher than TV ad recall, with 28 percent of viewers correctly identifying a TV ad with some aid, versus 50 percent correctly identifying an online ad with some aid. Similarly, a TubeMogul study (PDF) found that among viewers who watched an entire video ad, the rate of message association more than doubles, from 8.3 percent to 20.5 percent over the study’s control.
The same IPG Media Lab study, which used measurements of facial expressions, eye movements, and biometrics to determine participants’ engagement with TV and online videos, found that while user engagement looks good with viewers using DVRs, results show that people actively avoid ads. The study noted that one of the advantages for online video ads is that platforms often don’t allow users to skip or fast-forward through ads, thereby making it easier for brands to actually get users to see their videos. Additionally, Video Brewery reports that 90 percent of shoppers at a major retailer’s website say that they find video helpful in making shopping and buying decisions, further demonstrating that videos and therefore video ads can be effective in providing information that influences purchase decisions.
Adam Lisagor of the famous Sandwich Video, the creative agency/video production facility of choice for Silicon Valley startups, talked to Inc. about how brands can effectively use video ads to connect with consumers. He said that video advertisements enable companies to tell the story of their business or product in a linear way, without having too much information “shoved in our eyes and ears.” He recommends keeping promotion videos within 90 to 120 seconds, though for a simple product even as little as 60 seconds can be the most effective.
While clear language and an easy way for viewers to envision using and enjoying a product both make for a successful video ad, Lisagor notes that the effectiveness of the video ultimately depends upon the quality of the product. He says that, “The biggest mistake to make when embarking on a video is to assume that a video can answer questions that the product can’t on its own,” pointing to the fact that slick advertising can’t magically make a vaguely thought out business gain millions of shares or new customers.
Lisagor’s business is famous for producing high quality video advertisements that startups use to promote themselves, so Sandwich Video’s ads are slightly different than the “normal” video ads used by a more general base of advertisers. An IAB study based on a campaign for “a major national brand” looked at the online video ad lengths that are more common for general advertisers, and found that ads that are too short are hard to understand, with 5-second ads proving difficult to effectively use to convey a message.
Fifteen-second ads had the highest brand association, were the easiest to understand and the most cost-efficient, plus were the best length for video ads shown before other content. However, IAB found that while a 15-second ad is effective at conveying a “simple, rational” message, the length is more challenging when conveying an emotionally resonant message. Thirty-second ads excelled at conveying emotional or complex messages, were the most likely to be shared online, and worked particularly well in user-initiated placements.
Top Tech and Web Companies Look to Improve Ad Targeting
Major web and social media companies are experimenting with its own advertising programs to figure out what works and what doesn’t with online video ads. Twitter recently launched a beta of Promoted Video advertising with a cost per view ad buying model that charges advertisers only when a user presses play to watch the video. Advertisers will also get tools to measure the reach and effectiveness of their video ads, and will be able to see how many users watch the entire video, and comparisons of paid versus organic video views. Twitter’s Video Card tests earlier in the year found that tweets with native video generate better engagement, and the Promoted Video program is a way for Twitter to monetize that engagement and gain advertisers.
TechCrunch reports that Facebook is also gearing up to compete with online video ads, recently completing its acquisition of advertising startup LiveRail. The 170-person team is expected to help Facebook better target the video ads that run in the News Feed, plus attract more advertisers. Meanwhile, Facebook could help LiveRail with its targeting of ads across websites and mobile apps, making ads more relevant to viewers.
Advertising Age reports that Instagram ads could also be a vital part of Facebook’s “mobile empire,” with the app’s 200 million users already beginning to see (and engage with) static ads as part of the pilot program Instagram started with advertisers eight months ago. Some estimate that with 15-second video ads and app-install ads added to the mix, Instagram’s advertising business could reach $100 million per quarter in sales. That’s possible given the high rate of engagement that Instagram users have with the platform, and their excitement about engaging with a new kind of content. Flipboard will begin running video ads on its platform, with Re/Code reporting that the ads will begin running in September, with Chanel among the first advertisers to participate.
Last week, we reported that Google is testing a new method to better target ads to smartphone and tablet users by connecting the tracking mechanisms that watch what they do in mobile apps and what they do in a mobile browser — mechanisms that have traditionally operated separately from each other, meaning that brands and ad networks couldn’t effectively use the full complement of a user’s activity to accurately target ads.
Facebook is tackling a similar challenge by working out a method to track users’ activity across devices to more accurately target advertising, using a universal ID that links users’ online activity to their registered Facebook accounts. Facebook claims that 32 percent of users who show interest in a Facebook ad later convert and make a purchase — which, if true, means that Facebook’s ads are pretty effective at targeting products to interested users.
More sophisticated tracking methods will impact how online video ads are targeted, and ultimately improve the ads that you see online. Though it’s unlikely that all video ads will suddenly live up to the most rigorous judging standards for a compilation of the most memorable Super Bowl ads, brands are likely to craft more engaging ads as they gain better tools to measure the reach and effectiveness of their ads. While it may still be annoying to have to sit through an ad before your video plays, at least those ads will be better tailored to interests, more relevant to your content, and maybe even more useful. That’s a win for you as a viewer, for the ad network, and for the advertiser who pays a little more attention to getting their ad targeting right.