Last week Kevin Haley wrote a nice article on the price of video targeting in which he explored the associated value and resultant ROI of well-placed video advertisements.Kevin is absolutely correct that when applying smart targeting you will see a significant bump in performance for a minimal increase in pricing.
However, I would add that creative and context can have an equally important influence on performance. Kevin’s article doesn’t go into detail about the types of properties where the advertising was delivered or at what price point the campaigns were purchased. Both location and price can have dramatic influence over the ROI metric.
It is important to distinguish between the varying objectives of the marketer, whether it be brand building, focusing on an immediate response, or lead generation (as in Kevin’s example of CTR). The metrics of success vary widely for each of these objectives and there are different levers that can be pulled to positively impact success in each scenario.
With direct response programs, for example, the easiest lever to pull is price. We have seen prices fall dramatically for banner advertising especially with the increased use of DSPs and Exchanges and therefore see a direct correlation to increased performance. The same is and will be true with video, but what Kevin’s article is missing is the price point at which the case studies started. Most direct response oriented video campaigns are priced between a $4 and $8 CPM so a 10% price increase for targeting will have a negligible positive impact on ROI.
However, if you are buying premium video spots from top-tier publishers where rates are much closer to a $35 CPM, a 10% increase has significant impact and therefore will make the required performance increases much harder to obtain.
How does all this help us understand the overall strategy for video advertising and the various ways to make video work for marketers? First off, I don’t believe that online video is the best vehicle for direct response. We have other vehicles that are more price-appropriate to meet the ROI goals of direct marketers such as email, search and audience-targeted banners. So I’d rather see us use online video for more brand-oriented programs.
That is not to say that there aren’t ROI goals for brand marketers, but there are other factors beyond price that can deem a program successful, such as environment and creative. Video is, after all, about sight, sound and motion and, therefore, much more about creating an emotional response with a brand.
Things to consider when leveraging video online:
Environment: Make sure that the content adjacent to your message is brand relevant and fits with the creative execution. Think of the video ad as product placement that must seamlessly gel with the consumers’ content experience.
Creative: Don’t expect the 30-second spot to work as it does on TV. 15 second spots are much more appropriate for the time-sensitive, multi-tasking online consumer. Take full advantage of the new and exciting high-impact executions now available on the market to showcase your message and product.
Engagement/Interactions: Leverage new capabilities from companies like Panache (just acquired by 24/7 Real Media) or Unicast to inject more usability within the video advertisements. Give the consumer the ability to pause and explore your message, choose longer form videos on-demand or request more information directly from the ad.
Metrics: Capture all available engagement metrics with the goal of improving the creative, determining the product features that prove most interesting to consumers, and understanding a customer’s ‘hot buttons’. Pay close attention to the demographics and behaviours of the viewers to help shape and optimise the media plans both on and offline.
Scale: Work closely with a partner that can offer scaled, targeted reach across quality video content to ensure that your video is widely seen and heard, not only from one or two video sites.
Be Aware: Don’t accept in-banner video as a replacement for pre- or mid-roll video just because it’s cheaper or easier to buy. Remember adjacency to content matters and, if done well, the creative will be as entertaining and informative as the content that first attracted the consumer to that site.
Analysts are predicting a 43% growth in online video advertising in 2012 with total spend reaching $7 Billion by 2015. January is an excellent time to take stock of your capabilities. Are you ready for this tremendous growth? Do you have the creative capabilities, the quality placements and the metrics to prove out the ROI that will keep your clients happy? Here’s to a new year filled with growth and prosperity for our industry!
The views expressed here reflect the views of the author alone, and do not necessarily reflect the views of 24/7 Real Media, its affiliates, subsidiaries or its parent company, WPP plc.
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