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Digital video series: What is the future of online video advertising and will it take over from TV?
The Drum catches up with a cross-section of the online video industry to discuss the evolution of online video advertising.
As part of The Drum’s latest digital media supplement, focused on the opportunities of online video, we are publishing a series of articles exploring a range of topics, from how to produce effective branded content to the challenges of video real-time bidding. In today’s article, we ask: What is the future of online video advertising and will it take over from TV?
As for whether digital video will take over from TV, I think digital video is more likely to take budget spend away from other mediums, such as print, outdoor or digital display, rather than TV. Our recent 2013 UK Digital Video Advertising report gives a clear indication of where things are headed in this space.
As with any development within advertising, including the future of online video advertising, it depends on the audience. The future of online advertising is intertwined with how the video on demand (VOD) market develops. I don't believe however, that TV will ever stray too far from the centre of campaigns, as it can still draw large crowds and produce high volumes of impressions from a marketing perspective. TV will always have its place, but will come under increasing pressure to become more accountable, especially with the advent of connected TV.
It is essential to understand that they are different mediums, using similar ad formats, that should be complementary to one other, like any other type of media. The future of online video advertising will focus on addressable media – the ability to target people based on their age, gender and interests.
The winner will be the player that can generate the most efficiency – providing the right message to the right audience at the best price. Data will define the future of video advertising, playing a role before, during and after ads are seen by the consumer. Online video won’t take over from traditional TV per se, it’s not simply a case of one medium replacing another. With constantly improving streaming capabilities on smartphone and tablet devices, including rising 4G network subscriptions, consumers are watching video content on more than just their TV.
Online video advertising won’t kill TV, although as more and more content is viewed on smart TVs there will obviously be a shift. As part of The Drum’s latest digital media supplement, focused on the opportunities of online video, we are publishing a series of articles exploring a range of topics, from how to produce effective branded content to how online video compares with TV. In today's article, we take a look at the key to effective interactive advertising, and what formats are best when it comes to engaging viewers.
Steve Doyle, European commercial director, InSkin Media and IAB Video Council chairman Making your video advert relevant for the online environment and the audience. Peter Browse, creative technologist, Beattie McGuinness Bungay The key is having relative and worthwhile calls to action, that are presented in the right places and don't annoy the audience.
Gavin Morgan, VP business development, Europe, Innovid Building the interactive creative around the KPIs of the campaign is key. Rob Cootes, director of UK and international business, BrightRoll Assets – if you have great video assets then you should make the most of them. Ideally, your focus should be less on standard metrics and instead on things like open rates or engagements.
Despite the fact that this technology has been around for a long time, a lot of advertisers are still not using it. Suranga Chandratillake, founder and chief strategy officer, Blinkx Length is key in order to engage consumers.
Rob Cootes, director of UK and international business, BrightRoll We have found that the most effective way to drive engagement on digital video is through the use of overlays, skins and takeovers.
Steve Doyle, European commercial director, InSkin Media and IAB Video Council chairman Any formats that stand out and offer relevance to the user, without disrupting their viewing, should work well. The previous instalment of The Drum's digital video series explored the impact of proposed viewability standards. Facebook, Instagram, and Twitter have all introduced new digital-video ad products.A Social video offers several major advantages from an advertiser perspective, includingA huge built-in mobile audiences, advanced targeting, and native-style ad units. Over the past decade, display advertising has evolved from being static display ads to engaging formats across multiple platforms with numerous features from dynamic messaging to interactive video. In the landscape ad agencies now work in, digital video ads are no longer so irrelevant that all consumers just skip them.
Recent figures break down the surge: online video is now the fastest-growing ad category, growing 34 percent last year to nearly $11 billion. According to a recent report by eMarketer the global mobile advertising market will surpass $100 billion in spending and account for more than 50 percent of all digital ad expenditure in 2016.
Last year saw channels open up to video ads on apps geared toward younger audiences, such as Instagram and Snapchat.
Last autumn, Activision started sharing a 15-second clip from a longer live-action video on its Facebook page and on Instagram. And with mobile Facebook adoption continuing to soar, this new study by Mixpo is especially noteworthy: Of 125 agencies, brands and publishers surveyed, 87 percent plan to run video ad campaigns on Facebook.
Content in digital video ads has changed too, something we’ve seen across all platforms.

Online video ad revenue will reach nearly $5 billion in 2016, up from $2.8 billion in 2013, while TV ad revenue will decline by nearly 3% per year during the same time period. Video ad views exploded in 2013, topping over 35 billion views in December, averaging over 100% year-over-year monthly growth during the year.
Online video ads are significantly more expensive than other formats, but prices are steadily declining as more publishers rush into video, and placements open up. Video ads have an average click-through rate (CTR) of 1.84%, the highest click-through rate of all digital ad formats. Viewability, the question of whether video ads are actually seen by multitasking online viewers, has emerged as an issue, but we believe that overall demand for online video is too high for viewability to put too much of a crimp in the video ad market. Streaming devices and connected TV accounted for just 2% of online video ad views in the fourth quarter of 2013, but companies like BrightLine are experimenting with formats to grow this new niche market.
Newly launched video ad platforms have been among the companies to adopt programmatic tools, including real-time bidding, ad exchanges, and advanced analytics. Examines how video ads stack up against other digital advertising formats in terms of both cost and performance. Looks at the issue of viewability, and explains how the problem could impact future spending on video ads. Our BI IntelligenceA INSIDER Newsletters are currently read by thousands of business professionals first thing every morning. Our subscribers consider the INSIDER Newsletters a "daily must-read industry snapshot" and "the edge needed to succeed personally and professionally" a€” just to pick a few highlights from our recent customer survey. With our full money-back guarantee, we make it easy to find out for yourself how valuable the daily insights are for your business and career. Get the first page of google ranking with SEO in Edinburgh, our quality approach to Search Engine optimisation is guaranteed to improve how your website performs in the search engines.
Digital Video ads are the fastest growing advertising medium, brands can easily display their messages. Designed to be search engine friendly, we receive thousands of visitors every day, the majority of visitors are based in the UK. Every day, agency trading desks like IPG Mediabrands and Xaxis are using software like ours to buy ads that appear on TV content – the difference is the content is now streamed on computers, tablets and more. Advertisers are seeing the benefits of automated buying with VOD and it won't be long before they start demanding its use elsewhere. We are rapidly moving towards being able to effectively reach a consumer on whatever screen they are using at any given time.
This will be the single highest drive behind the development of online video advertising, and could see it take the majority hold away from TV. TV continues to be the best way to reach mass audiences and delivering high impact, but online and mobile video are very strong compliments to it.
The introduction of online GRPs into the digital lexicon demonstrates a shift in the way that digital marketers are approaching video advertising, and targeting TV budgets.
Linear TV’s issue of wastage, which is currently still the norm, will become less acceptable over time.
There is no doubt that the proliferation of different devices including mobile phones, tablets, living room entertainment systems, connected TVs, to name a few, are fundamentally changing how people access and engage with TV and video content.
We’ll move further away from simply buying environments and focus on our specific audience and the story we tell to them. What we will see is a convergence of video media as it’s accessed through an ever increasing range of devices, it will be driven by data and differentiated by the context, not the environment in which it is viewed. Rather than take over from TV, online video advertising and TV will unite forces and become one.
Additionally there are interesting second screen opportunities that can link with on demand and linear TV, so there's a lot of activity in this area. The ability to watch video content on numerous devices will continue the growth of online video advertising. In the short term online and offline planning and buying will continue the process of convergence. Video actually has the opportunity to complement TV as people can download video content to their phone that allows them to interact with TV programming. Advertisers have traditionally spent a lot of money creating brilliant TV ads, but don't always take time to effectively digitise. After that, its really about enhancing the user journey, giving the user something they want to engage with so they lean forward and take the opportunity to interact. It’s important to remember that an online video ad buy is not just about pushing your ad out to an online audience.
On top of this, adding some form of incentive to the call to action will have a profound effect on the impact of your video advertising. The message we send to our clients is that they should think more about a video solution rather than a TV solution with a digital video bolted on, and adding some form of interactivity is key to this.
For online video, 3-4 minutes is the maximum length before brands experience a severe drop-off rate. Engagement rates can vary between one per cent on a normal campaign to three per cent or more with overlayed microsites, and we often see dwell time increased by in excess of 30 seconds.
Key to engagement is that the ad is seen; according to comScore’s visibility definition (50 per cent of the ad in view for one second or more), 54 per cent of online ads are never seen.

And it’s expected to grow an average of 29 percent a year through 2017, when it would top $23 billion.
Programmatic ads, which refer to the automatic process of how time is bought to reach specific audiences, now offers opportunities to improve the targeting of video ads. The ad delivery platform LiveRail quotes Nielsen OCR data that found the digital industry is only about 60 percent accurate in its demographic targeting.
Automated targeting technology is not the only reason campaigns have been successfully launched there. The fact that mobile access to the Internet is the norm for a growing majority of usage time did not go unnoticed.
Overlay video technology places an interactive layer of clickable options overtop of a streaming video.
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UK Classifieds is free to join, it's free to reply to ads, most categories are free to advertise in too. Nielsen Online Campaign Ratings gives agencies a way to make direct comparisons to TV, and products like our own BrandPoint help them act on that reporting.
However, in order to achieve this, advertisers need to be buying their media programmatically and centralising the decision-making process. We will be creating a more effective dialogue and gaining a far deeper understanding of our viewing audience. What’s more, as consumers are plugging their digital devices into TVs to watch online video content, they’re also seeing online video ads on the biggest screen in their homes. Part of this process is that both TV and online video mediums need to learn from each other. Online video advertising will grow into a whole new area of creativity, which we have already seen the forerunners of this year with Vine and Instagram. Video advertising can be fantastic, but attention needs to be taken to optimise for digital platforms, and more advanced measurement should be discussed with clients. If we're going to raise the interactivity with these adverts, they need to include levels of functionality that make them useful to the end user. If a video has an offer or a competition attached to it, you should make that the focus of the call to action without obstructing the video. For mobile it is significantly shorter, with brands needing to keep content to 1.5 minutes before the audience becomes disengaged and inevitably moves on to the next interesting video. As this debate heats up, so intelligent formats will achieve cut through on cluttered pages, and offer results for advertisers above their expectations. A subset of programmatic is real-time bidding, the ability to block inappropriate ad channels for specific audiences, and better analytics reporting -especially on mobile devices – mean that digital video ads are increasingly finding the right audience. In Canada, spending on programmatic ads in 2014 only reached about 15%, but is expected to double this year, said estimates in another report from the company.
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However what is and will always remain true is that consumers will always be interested in high quality entertaining content regardless of its source and delivery mechanic. The personalisation that advertisers are used to in the online world will sync with TV advertising. Traditional TV has to keep up with the tracking and targeting capabilities of online video technologies.
It's not enough to just show a video with a URL or click through, the presumption that someone will or should click through to something is naive.
On top of all that, working with a great team and great people who can bring your ideas to life is key! While a TV slot allows you to passively reach 10 million people in one 30-second slot, the online community is a highly engaged audience eager for engagement.
The key is to create truly snackable content that users can digest quickly and share easily – that means short and snappy, but always premium content with a solid story. Last year Instagram CEO Kevin Systrom’s personal involvement in vetting ads attracted special attention.
The online video advertising sector has to find metrics that attract the attention of the TV planners and buyers who make their decisions on gross ratings points.
Provide a level of depth that otherwise the user would have over looked and you'll be rewarded with higher levels of engagement and conversions.
Over the past year this has become even more important with the rise of mobile use and increase in social sharing – this is trend we predict will continue to rocket into 2014.

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