Long Story Short: Digital Video Advertising

April 30, 2024

There is a theory that states that every marketer in the world has at least once heard the saying “video is the king of advertising.” Video ads are short, informative, easy to understand, and versatile in use. Telling a story is the best way to convince users to make a purchase and for that purpose, videos are unmatched. Video ads are easier to remember and recall than static or text creatives. In a matter of seconds, just before users can skip an ad, videos have the power to impact their decisions like nothing else.

New emerging technologies and trends like VR, AR, and Connected TV create additional opportunities for advertising and other marketing activities that would not let this format fade away any time soon. But making video ads is not that simple and requires special treatment in order to make them more effective than annoying. So let’s find out what it takes to build a successful video marketing strategy. But before we get to that part, we have to take a look at the basics first. Why should marketers even use video ads? What are the different types of video ads? What benefits do they have? These and other questions are answered below.

What is video advertising?

Video advertising is the concept of advertising activity that utilizes videos. Video ads and other promotional materials are usually played before the actual content if we talk about streaming, during (in the middle of content), or after a program. We can also include display ads in this category if they contain videos. Such practices include but are not limited to ads that are activated upon mouse over and native video ads delivered through digital advertising networks.

Marketers also call video advertising a special set of promotional actions or a marketing strategy that involves using videos in order to build brand recognition, tell a story, increase demand for a particular product, deliver a specific type of message, or perform other informational purposes.

The state of video advertising platforms today

In modern marketing, video advertising is one of the most common practices to interact with online (mobile and web), social, and linear TV audiences. According to IAB, digital video advertising represented about 56% of global ad spend in 2021. Advertising professionals expect video to remain the dominant force in the field for at least a couple of decades from now. So despite the technology being quite old now, it’s still not too late to learn about it or use it to improve engagement and other campaign metrics.

Wyzowl, a video-making company, conducted a State of Video Marketing survey asking nearly 600 marketers to share their insights about video ads. Their 2022 report stated that 86% of businesses used video ads in their marketing activity, while 92% of respondents pointed out videos to be an integral part of their strategy. Here are more interesting stats from the survey:

87% of marketers admitted that video ads generate a positive return on investment – a three times better ratio compared to 2015 results. This goes to show how digital video ads improved in both quality and relevance.
86% of respondents report videos to be effective for lead generation.
81% stated that video ads directly improve sales.
94% of respondents say videos are helping to increase brand awareness and user understanding of their product.

However, the tool’s popularity does not guarantee success for the one who uses it. Many studies show that most respondents feel frustration and anger from watching too many ads. For instance, one-quarter of the US web users use ad blockers, according to eMarketer, while 60% of Irish VOD (video on demand) users felt their ad-supported services had too much advertisement. This proves that in order to create unobtrusive and genuinely valuable ads, especially video ads, it takes precise analytics and the right ad frequency approach.

Video advertising examples, trends, and tendencies

The digital environment does not stand still and is constantly evolving. Experienced advertisers know that in order to remain competitive they have to keep up with new technologies and audience trends. In 2016, when YouTube added video ads to its platform, the 6-second advertising format became the most popular throughout the digital VOD realm. However, since 2014, the average video ad length steadily climbs up as the 30-second format gains wider recognition. According to Statista, over 60% of digital video advertising impressions in the United States for the period from Q4 2015 to Q2 2016 were 30 seconds long. This shift illustrates how users are willing to sacrifice more of their precious seconds to watch more engaging advertising content.

This is also supported by research conducted by native video advertising company ADYOULIKE. The document shows that 72% of smartphone users are willing to engage for longer than six seconds if they like what they see. Additionally, these users are more enthusiastic about viewing video ads on mobile than on desktop. Mobile users’ attention span is quickly decreasing after the first 20 seconds, though. This demonstrates the necessity of length optimization based on the type of digital traffic advertisers works with.

Video advertising budgets are rising across all main digital channels. According to Statista, in 2021, digital video ad spend in the US was approximated at slightly over $55 billion, with the projected increase to nearly $80 billion by the end of 2023. Total digital advertising spend in the United States was expected to increase from $191 billion to $250 billion for the corresponding period. A similar picture is observed across Europe, Latin America, and the Asia-Pacific region. Advertisers should take into account these investment tendencies to accordingly adjust their marketing budgets.

Another point of interest lies in animation trends as it gets more and more popular in advertising. Animations tend to draw viewers’ attention more compared to ‘real’ video footage and companies can utilize them to keep users looking at their screens. Marketers may also experiment with mixes of real-life footage with cartoonish animations and motion graphics making video advertising more diverse.

Animation technology might make creatives more appealing as marketers explore their ways to excite users. A good example, as often happens, comes from the marketing giant McDonald’s. As a part of the company’s 2020 UK Christmas campaign, McDonald’s released a 90-second emotional advert telling a story about reigniting the Christmas spirit and the mother-son connection. This is a good case of how animation and a heartwarming twist can encourage viewers to watch a whole advertisement and even enjoy it.

Types of video ads

One of the main advantages video ads have is the variability of options to choose from. The first and best-known video advertising type is in-stream. As mentioned above in this text, in-stream ads can appear before, during, or after the content. This type of advertising is familiar thanks to giants of the likes of YouTube using it. The technology allows making these videos partially interactive, encouraging viewers to click a button to claim an offer, for instance. In-stream ads are most frequently shown before a video with the ability to skip it after around 5 seconds or continue watching. The longer a video is, the higher chances for mid-content ads to pop up.

Another type of video ad is called out-stream. These are aimed at mobile platforms, smartphones, and tablets for the most part. Out-stream is the kind of ads consumers see on a daily basis browsing their iPhone apps or mobile-optimized websites. They are normally played volume-off with the ability to unmute and simple controls to interact with an offer and get additional information. This video advertising type is best suited for quickly and relatively cheaply increasing reach.

Non-linear video ads appear during video content playback without disrupting it, as an overlay or as a complementary video sequence. If a user wants to interact with that ad, it will pause the main video, and if not – it will hide by itself. Non-linear video ads can also be implemented inside a game. Users will view an ad to get a reward in return, usually in the form of small in-game empowerment like bonus lives, coins, buffs, or weapons.

Auto-play video ads are the type of digital content that is enabled at the end of content, for instance at the end of a news article. It is highly effective when used in tandem with a topic of viewed content. So, for example, when a user reads about car engines that ad would display a car repair atelier video ad or spare parts shop offers.

One of the recent novelties in the digital environment, shoppable video ads, displays real-time offers over the viewed content. Well, technically those are not exactly video ads, but rather smart video add-ons that promote goods that can be found inside the content. So, for instance, when a user sees a character wearing a Gucci bag, a shoppable ad will ideally offer the same item available for purchase in the nearest boutique. The system can also be implemented inside an app, which is proven and successfully tested by TikTok.

More progressive video advertising techniques such as native video ads were invented to bring users’ viewing experience to the next level. Native video ads, for example, can be seamlessly integrated into the content to make it look like an integral part of the scene but not like an actual ad and therefore deliver a brand message more convincingly. It normally contains in-feed ads that are directly placed on platforms that are popular among targeted audiences. Native ads can also be blended into web pages to look like original parts of a website. No wonder these ads are much more credible among users and ultimately increase click-through rates. The statistics provided by eMarketer show that native video advertising spend goes up yearly.

Reasons to use video ads

Advertisers may take advantage of many possibilities that video advertising opens. As it has been already clarified, video content draws user attention, boosts brand recognition, and drives sales when used right. There are an unlimited amount of combinations and methods to create effective video ads. So, for creative advertisers, the main benefit comes from imagination.

One of the key benefits of the video advertisement is its shareability. The best video advertising is video advertising that goes viral. You can make them funny, stupid, beautiful, nasty, or even creepy. All of this works as long as your video touches emotions. People tend to share such videos on social media for free to let their friends experience the same feelings. And in doing so, it often does not even matter if that ad triggers bad emotions as long as brand awareness increases since not all the brands bother with keeping their brand image ‘clean’. Video ads are the best emotion triggering tools in marketing and if viewers remember what they see, there’s a good chance they remember a logo or brand name behind it.

Video ads are convincing. Since videos include multiple information sources that connect several brain sections responsible for visuals, text, and sounds, it’s way easier to tell a persuasive story fast. This information can also be used to educate viewers in an interactive and exciting way, for instance, to teach them how and why to use your product correctly.

Video ads are better at telling stories than regular banner ads, and they also get more clicks. Smaato says video ads have 7.5 times bigger click-through rates (CTR) than average display ads. We can spot roughly the same ratio on Facebook.com, despite Meta’s algorithms generating more impressions for image-based creatives. According to a survey among Facebook marketers, the short video is the most successful Facebook ad format conducted by Databox.

Relying on video ads can help cover the audiences that, for some reason, do not react to text or banner creatives. Through videos, marketers can experiment with using catchy songs, unusual sounds, creative animations, bright colors, convincing voice tones, evident graphic proofs of effectiveness, and other elements to come up with unique and effective combinations.

Analytics predict 5G networks to expand worldwide, which will increase the average connection speed of mobile internet. This means that advertising with video will become more and more applicable for mobile users and if you are planning to invest more in mobile traffic, there will be fewer connectivity issues over time.

How to make a good video ad?

The reasons to use video ads look convincing indeed. But if you intend to act, please take care of the following points first.

Assess key performance indicators for the job first. Do you want to increase brand awareness or drive sales for a particular product?
Decide whether to implement the idea by working with experienced contractors or try to create videos yourself. And what’s more, the latter is not such a bad idea since nowadays anyone can be a video producer using a couple of apps on their iPhones.
Consider the types of video ads available and try to align them with KPI goals. Which type is going to suit your message better, and which one’s going to be more acceptable to the target audience?
Try to center the idea of a video around a story. Do not try to sell something right away. That will never work unless your product is manna from heaven because modern customers have learned to ‘filter’ such ads immediately.
The first five to ten seconds of your video are key. Usually, advertising platforms will have an option to skip ads, and most users will click away, so it is vital to excite them right away that they continue watching.
Approach with a sense of humor. Everybody likes a good laugh, and it is not a secret that funny ads are more engaging and memorable, which has a direct positive effect on sales.
Do not forget about search optimization. SEO tagging will make your video visible for search engines, and thus for Google search users. This kind of optimization is not very complicated yet an important operation.

How will the video advertising industry continue to evolve?

When we talk about the future of advertisement in general, we can not forget about personalization. The deeper we dive into the digital world, the more personalized ads we will see there. Videos are not an exception. Targeting based on location, demographic, interests, and browsing history will only become more precise, more user-friendly, and more data-secure. At the moment social media companies, Meta, in particular, are exploring personal advertisement approaches by adding more variables to targeting algorithms.

Both new hardware and software technologies will continue to emerge creating new promising fields like Connected TV that are expected to shape the future of ads. As more people turn their attention away from traditional TV programming, services like Android TV, Roku, or Amazon Fire TV gain their audiences. Marketing professionals expect linear TV advertisers to eventually switch to CTV platforms entirely. Other rising stars of digital tech like augmented or advanced reality will probably find their way to ad-based content monetization as well.

For as long as the video remains the most emotionally charged advertising medium, there will be attempts to statistically and theoretically explain correlations between certain actions and results. The key variable in this equation is user data and the more data there will be, the better calculations marketers will be able to perform. We expect the speed of content strategy optimization and effective content production speed to accelerate as advertisers learn to utilize user data better.

Live streams will keep on expanding, especially in the esports field. The most notorious example is Amazon purchasing the streaming service Twitch for nearly $1 billion in 2014. Since then, Twitch’s average concurrent viewership jumped from 350k in 2014 to 2,78m in 2021, according to twitchtracker.com. The service’s revenue has increased in about the same proportion from $0.1 billion in 2016 to $2.3 billion in 2020, according to Business of Apps. Of course, live streaming is not only growing on Twitch. YouTube Gaming, Facebook Gaming (after it has merged with Mixer), and other platforms will have their piece of the pie.

Summary

As more and more brands are integrating their products with video content, brands will have to further rely on influencer video promotions. Some marketers even believe that most marketing content will be created by users and influencers and not brands themselves. In order to stay ahead of the competition, advertisers should, among other things, explore this possibility.