Commentary: SpotXer Justin Ehly Comments on Performance of Video Ads vs. Banner Ads

jman.jpg With all the talk last Friday about the Google-MySpace partnership and the fate of Facebook’s ad program, I want to comment on an online ad platform that is not only underused by current media plans, but also under realized in terms of effectiveness, streaming video.

At SpotXchange (http://www.spotxchange.com ), we work with a variety of clients and like many a new media we do our share of direct response and performance based ad campaigns. I read a snippet in Friday morning’s trades that quoted a BusinessWeek article with, “the truth about online ads is that precious few people actually click on them,” and went on to discuss the industry average CTR on banners is less than .2%, and one thing really jumped out at me, SpotXchange on a bad day delivers a 1% CTR, that is 5x the industry’s average banner CTR! Now we obviously don’t work in a vacuum, but it appears we deliver a more effective ad unit, and that translates into engaged consumers!

We deliver in-stream video ads that are only played when a consumer (a person sitting a computer) tries to watch some type of video asset or is taking a break during a casual online video game, i.e. Solitaire or Diner Dash. Our ads are front and center, cannot be skipped and albeit somewhat intrusive, we are in and out of the consumers life in about 15 seconds. To sweeten the prospect of our video inventory, most of our video is pushed into cyberspace accompanied by adjacent banner ads, so anything that is not covered by the :15 second spot can be made-up in the banner, i.e. local market specials for national retailers and concert promoters. Since banner creative can often be edited faster video creative, if a campaign neglected to include a call to action in the video ad, banners can be quickly edited and deployed across our network.

We recently worked with one of the Hollywood studios to promote a DVD release and in order to prove the power of the SpotXchange network we agreed to run a cost per click campaign. Through real time optimization and content targeting, we delivered a bottom line CTR of 1.5%, but the client did not have any call to action in either the video or the banner, so we [SpotXchange] were left to the online savviness of consumers who saw the ads and clicked on the video and/or accompanying banner. By call to action, I am referring literally to verbage saying “click here for more information,” or, “click here to order,” rather the video creative was repurposed from the client’s television campaign. Overall, we performed on par or better than the other online outlets the studio used and we only ran the spot on a handful of our publishers. Moving forward we are working with the studio to capitalize on unrealized campaign effectiveness by using calls to action and we are looking at going broad and deep by blitzing the entire network then using the SpotXchange controls to optimize campaigns for maximum CTR efficiency. By optimizing, I literally mean picking off the publishers and/or publisher channels that do not meet a minimum CTR threshold established with the client.

An advantage to the SpotXchange network is the casual gaming community. Companies such as Neoedge develop systems to push video ads into natural breaks in game play, i.e. when you start a new game of Solitaire, before the cards shuffle the consumer is asked to watch a :15 commercial from a sponsor. Think about this audience, this is an audience that is simply wasting time! Sure they are having a good time playing a game, but if something more interesting pops along, they are very likely to check it out and because of this we have exceptional CTRs with our online casual gaming partners. Even more interesting is that this audience is very active from 8a-2p, tends to be heavily female skewed and has a high propensity to have children in the home. Any advertiser looking to reach a female skewed audience in a family friendly environment should make great use of this inventory. This includes the studios, grocery store chains, packaged consumer goods and cosmetics. Further, the SpotXchange tools allow for day and time specific advertising, so campaigns can be set up to run heaviest during the 8a-2p time frame.

Now, there are still those advertising professionals that feel that pre-roll video ads are intrusive and annoying to the consumer. So how do we combat this? There are a number of things that need to happen. As an industry we need to remind consumers that nothing is free, not even all those fun user generated videos on Metacafe and YouTube. At some level, someone has to pay for storing and serving all those videos and more importantly, protecting all the personal information that users openly give to such sites. In order to offset such costs, advertisers are invited to the table to buy sponsorships, promotions and creative ad inventory.Creative needs to enhance the online experience. In fact, last week there was an article in the trades where the author suggested that advertisers need to look at their creative as an extension of the online user [consumer] experience. For example Budweiser and Bud Light commercials (http://www.youtube.com/watch?v=4dHaOwC_4No or http://www.youtube.com/watch?v=lMfg-cR0jKE ) are some of the most memorable ads in existence! Remember the frogs back in the early 90s or the, “I love you man,” series in the mid-90s? Or the most recent ESPN promos featuring the notorious college football rivalry between Ohio State and Michigan (http://www.youtube.com/watch?v=Zv0_EpF5SyY ), this creative is not only memorable, but it’s fun and entertaining and at the same time it makes the consumer want to engage with the brand. In fact, the ESPN Commercials were viewed 83,069 times when I wrote this blog and those impressions were not only gratis, but consumers actually sought out the video, talk about engagement!

As for those ad professionals that are proud of being rebellious and closing pre-roll video ads, I like to ask them how many different websites they have to visit in order to find what they are looking for [video-wise] without having to watch a pre-roll ad. If they have to visit 10 different websites to watch whatever video they are after and all 10 of those sites use pre-roll, do they keep going on to site number 11, do they give up and not watch the video, or do they give in and watch the ad?

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