Online Video Ads: What’s the hype?

Word-on-the-street: Video ads are a savvy strategy for marketers because the number of online video viewed has been steadily growing, as reported by eMarketer, and has a high click-through rate when compared to its alternatives.

The number of U.S. online video viewers is growing.

The number of U.S. online video viewers is growing.

Video ads had the highest click-through rate of all online ads in Europe during October-December 2008.

Video ads had the highest click-through rate of all online ads in Europe during October-December 2008.

Even more, there is talk that online video ads should perform better than its alternatives during recessionary times.  Erik Sass from MediaPost reports:

While not exempt from recessionary trends, it probably won’t suffer as badly as traditional media because it’s more cost-effective — but it’s still going to take a substantial hit, according to the lead speakers at OMMA Hollywood on Monday morning. Still, there are some glimmers of hope that certain recessionary trends have already bottomed out.

Online ad spending will probably fall 8%-9% in 2009, according to Dr. Paul Kedrosky, an economist and the editor of Infectious Greed, a financial blog — but that looks good compared to the rest of the media.

So, how is it possible that online ads are so great and recession proof?

One plausible explanation is the law of reciprocity by Robert Cialdini, in his book, Influence: Science and Practice (New York: Harper Collins, 1993).  Basically, the law of reciprocity boils down to this:  “a person can trigger a feeling of indebtedness by doing us an uninvited favor”.  Consider this example from Cialdini (p. 29):

For instance, the American Disabled Veterans organization reports that its simple mail appeal for donations produces a response rate of about 18 percent.  But when the mailing also includes an unsolicited gift  (gummed, individualized address labels), the success rate nearly doubles to 35 percent.

Online video ads are a form of entertainment and people are willing to be entertained.  An IBM study reveals that almost 60% of its study respondents said they were willing to provide to advertisers some personal information about themselves in exchange for something of value, such as access to high-quality music videos, store discounts or airline frequent-flyer points.

Therefore, the success of online video ads lies in the law of reciprocity.

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Damian Davila

Ideas and concepts from Damian Davila, Ecuatoriano thriving in Hawaii. Pro marketer and blogger. Find him at @idaconcpts on Twitter.

4 Comments

  1. Video ads are growing as the connection speed is getting fast. I like this idea and i found it more better than TV ads. There are many exciting ad firms also coming with great offer, http://www.adwido.com is an example.

  2. Advertising may be a growing quickly in the online video space, but it is crucial that video content is properly targeted (and properly optimised) to drive traffic as part of a marketing strategy.

    The sheer amount of video content online, and the large number of platforms for distribution, means that companies need to think vert carefully about BOTH the content AND methods of distribution alongside advertising methods to keep click-through rates high.

    In the UK, my company have been working with brands and corporations on these strategies for the past few years. I’ll post back with our latest green paper in the coming days – but in the meantime, http://www.tagboxmedia.com will give you some interesting views on this in the blog pages…..

  3. Hi Paul,

    You wrote:

    Advertising may be a growing quickly in the online video space, but it is crucial that video content is properly targeted (and properly optimized) to drive traffic as part of a marketing strategy.

    I agree 100% with you about proper video tagging. If done properly, you can drive a lot of traffic. An example is at http://www.youtube.com/watch?v=Q01nnNL-oD4, where I uploaded a video that showed a video sequence in low resolution that I would use during the gigs of a band that I used to be part of. Even though the video was only meant to allow bar/venue owners to have an idea of the kind of video that would be projected on their screens, it started getting a lot of views from Argentina. After doing some keyword research, I optimized the tags and voila! this video now has over 25,000 views in its lifetime.

    Video content is very powerful in driving website traffic.

    I visited your website and I liked a lot the Project International video, quite impressive result for just 4 days of work.

    Keep up the great work!

    Damian

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