The Future of Video Advertising

We live in exciting times in the online advertising space, especially as it pertains to video. As we move away from stagnant, commercial-length ads and toward interactive, quick, and engaging video models, expect great things in the near future.  We’re also seeing some new video ad formats that likely will become ubiquitous in the near future.

Out-stream ads, those videos that play mid-article as you’re scrolling down through content on a news site or blog, are big with advertisers. The videos begin playing as soon as they’re within view on the screen.

Why are they worth considering? Right now, there’s not a great deal of video inventory, so advertisers have the unique opportunity to have their ads shown more (and more cheaply) before the market gets flooded. Additionally, the clickthrough rate on out-stream video is higher than in-stream, at around 2.5%.

And we’re seeing more diversity in native ads, with in-feed ads giving advertisers access to highly-targeted audiences, especially on social media. In-feed ads play when a social media user scrolls through her feed, and are twice as memorable as skippable pre-roll video ads on publisher sites.

Because advertisers can identify the exact audience they want to view their video ad on social media, the ads are relevant and more likely to be viewed. And the shorter, the better: in Facebook video campaigns, 74% of total ad recall is achieved within 10 seconds.

Right now, these ad formats are succeeding at capturing an audience’s attention, but over time, they may find that task more challenging. Expect publishers to continue to tweak the formats to give consumers a reason to watch or interact with a video.

What About cTV?

As cable companies scramble to find ways to make money when so many people are cutting the cord, Connected TV providers are raking in the money with video advertising. Ads play when an app like Amazon Prime, Netflix, or Hulu launch (especially for free accounts versus those that charge a premium to go ad-free).

Because these ads don’t play in a solid 5-minute block the way that commercials on cable television do, they’re more likely to be viewed (there’s not enough time for viewers to run to the kitchen or bathroom before their program).

And the fact that advertisers can directly attribute revenue to ads make the next generation of television advertising quite appealing. Right now, video apps are heavily advertising their own content (before an Amazon Prime Video begins, an Amazon Original is promoted), but we expect these ad opportunities to open up to a wider swathe of advertisers very quickly.

While it’s impossible to precisely predict the future of video advertising, we see it full of potential. It’s wonderful to see the industry shaken up; 30-second television commercial spots no longer serve their purpose. But when advertisers strive to provide real value and entertainment for their audience, that’s where the real magic of video advertising comes into play.

As an advertiser, keep your eyes open for innovative video ad opportunities and don’t be afraid to experiment. By being an early adopter to some of these newer ad platforms and formats, you not only will pay less for the privilege (before competition ups the price) but you’ll also lead the pack.