Are Video Preroll Ads on Rise or Decline?

Yes. Video prerolls are both growing and declining. The good news for viewers is that we saw fewer prerolls. But we saw more “polite prerolls” (option to escape) in Q1 2011 as reported by AdoTube/eMarketer. Since this doesn’t include YouTube data and presumably a small sample of total online-video ad streams it does need to be taken with a grain of (Morton’s: when it rains it pours!) salt.

Viewers will appreciate fewer prerolls (as reported by AdoTube), and advertisers will enjoy more "engagement" models
This "Right Guard" ad begs for engagement. Did you notice the "close" button?

Forget prerolls, friends. The increasingly competitive ad networks have a whole sleuth of weapons in their online-video ad formats that range from the innocuous “polite pre-roll,” to a bit more ominous names like in-stream takeover, ad selector, in-stream skin, inside-out roll, interactive overlay, video-in-video, interactive gaming overlay, data entry and capture, branded player, over the top, and beyond stream. I believe that Seroquel example, placing a “reminder” ad without “fair balance” adjacent to depression content is (shhh) a violation of FDA guidelines, but I digress. ANY of these ad-format names beats the “fat boy” branded by Point Roll.

Take a look at some of the bold “engagement” formats presented in AdoTube’s ad-format gallery and you’ll see why viewers are, according to eMarketer, about 30% likely to engage in an ad… even when not forced (hence the term “polite”). You’ll also see that it’s often not clear there’s an opt-out available.

The eMarketer report, titled “Options for Online Video Ad Viewers Leads to Higher Engagement” is encouraging. With online video being one of the leading (if not #1) fastest-growing portion of a marketer’s “media mix,” advertisers will want and expect formats that achieve their goals: from branding to engagement. This chart is important to viewers because it shows that “cost per impression” remains the dominant percent of spending. In “cost per impression” (often called CPM, or cost-per-thousand), the advertiser simply pays a few bucks to reach 1,000 eyeballs without much accountability.

"Cost per impression" still leads, but more interactive "engagement" ad formats are increasing (Brightroll Data)

While few of us welcome more aggressive online-ads, this also substantiates a business model to fuel the medium’s growth. While it’s easy to complain about intrusive ads (especially as the pendulum seemed to swing dangerously to the advertiser’s benefit in the past year), it’s a vital element to online-video’s maturity. If the advertisers don’t get what they need, friends, we won’t be seeing our content for free.

There are three ways to increase “engagements” in this online-video advertising medium, and I’ll list them from best to worst in order of sustainability: novelty, creative and targeting:

  1. Novelty: A new ad format generally enjoys a period of high engagement that’s deceptively high. We’re curious about what the ad does, and may not realize we’re engaging, so it’s not necessarily suggestive of purchase intent. In early February, a debut YouTube customer of YouTube’s “skip this ad in x second” preroll told ClickZ he was seeing a 30% engagement rate. That’s far higher than we’ll see as a norm, and a tribute to the novelty effect.
  2. Creative: Great creative always wins, and this is a fairly enduring trait. While overall engagement might slip when we’re “numb” to an ad format (like monkey-shooting banner ads, or even the “InVid” format that creeps up on YouTube… the best creative wins the best attention, engagement and results.
  3. Targeting: Ultimately the most sustainable and important characteristic of a high-engagement online-video ad is its ability to reach the right target. I can engage in a tampon ad, but it’s not going to sell more maxi’s. But if I get a rich-media ad over (or adjacent) to my valued content, then we’ve got a win-win-win (advertiser, publisher, viewer). That’s where we can expect Google/YouTube to be better in the long haul, but it appears the sophisticated advertiser networks are ahead. These ad networks marry data from a variety of sources to serve ads invisibly on the videos across a variety of websites.

So what are the takeaways to advertisers, video sites and us viewers?

  • First, the options available to advertisers means that online-video ads will begin to get as aggressive as other forms of interactive ads. This has positive and negative effects, but as long as it’s targeted it’s sustainable.
  • YouTube, which reports very little about its ad performance, has not radically departed from its debut formats, with the exception of breaking its early commitment to make pre-rolls optional. Now most pre-rolls are mandatory, but we can opt-out of some after a few seconds (at which point the “opt-out” means the advertiser pays YouTube and the creator less).
  • Ads are a vital cost-offset for those of us that have been enjoying free video content for 5 years and would like that to continue without avoid pesky Hulu-like subscription models (unless a “value ad” bonus to the cable contract, assuming we haven’t “cut chord.”).
  • And finally, Morton’s salt can be trusted. Trusted I say.

 

Author: Nalts

Hi. I'm Nalts.

7 thoughts on “Are Video Preroll Ads on Rise or Decline?”

  1. I say we go with a minimum 15 minute preroll ad,with occasional full page pop up ads. I mean,who wants to watch a crappy video anyway?……I can see some Advertising genius reading this and thinking…”Hmmmmm now we know what the people Really want,let’s get right on it team!”

  2. Prerolls are fine for videos that are longer than four or five minutes, but otherwise they are an infringement on the viewing experience. Often I watch videos out of curiosity or in order to show support for someone, but I hit the back button the minute I get hit with a preroll. It’s like being Rick-rolled in advance… which brings up the possibility of postroll ads. Although most people don’t watch a video all the way through, my guess is that at least 5% of the time people do and often they are attending to some other task by this time in which case they might be less inclined to dismiss the ad. Just a thought.

  3. I keep forgetting YouTube has obnoxious pre-rolls. Do I have any control over that on the videos I’m monetizing? I don’t care if I make a few pennies less; those things can go to hell. Nobody is going to watch a 15 second pre-roll to see my 30-60 second video.

  4. I dont find prerolls to be that annoying if theyre really funny. Like the Klondike Bar one where the guy listens to his wife for 5 seconds and wins a klondike bar for it. That actually made me crack up. They should just start doing more like that. Keep it short and funny as hell.

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