What is video advertising?
Video advertising is a type of video marketing strategy that uses video to promote a brand, product, or service through paid channels. The brand pays to display its ads in dedicated video ad spaces, such as social media, mastheads, and influencer pages.
Video advertising vs video marketing
Video marketing refers to the use of video in the promotion of a brand, product, or service. It encompasses all types of marketing, such as inbound marketing, content marketing, and social media marketing. Not all marketing videos pay for the ad space they occupy.
Meanwhile, video advertising is a subset of video marketing that specifically promotes brands through paid channels. Typically, advertising uses short-form videos and includes a call to action to drive sales.
Video marketing covers all stages of the marketing funnel, including awareness, consideration, conversion, and loyalty. Meanwhile, typical video advertising campaigns only focus on boosting awareness, consideration, and sometimes conversion.
Let’s use an example to illustrate the difference. Imagine that you work for a company that sells project management software.
Video advertising for a project management software can mean paying YouTube to play your ads to your target users. The ads would play before, during, or after the video content they search for. Typically, advertising videos would promote the brand to users who are unaware of its existence or full capabilities.
Meanwhile, non-advertising video marketing can mean posting on the company’s own YouTube channel. Videos can include anything from blatant promotions to more subtle brand-boosting tactics, such as educational videos on project management. They might also include software tutorials that cultivate loyalty among existing users.
Types of video advertising formats
There are multiple ways to approach video advertising. Understanding the different types of video advertising formats and how they are used will help you determine where to deploy your ads.
Linear ads
Linear ads are short video ads that play linearly before, in between, or after the main video content. They are the most common type of advertising videos. They are most effective at garnering user attention because they require full or partial completion before the user can move on to their desired action (which is watching the main video content).
Depending on their timing within the main video content, linear ads can be further divided into three types: pre-roll, mid-roll, and post-roll.
- Pre-roll video ads play before the main video content starts. They are widely used because they guarantee a full or partial view from the audience. Pre-roll ads typically run between six to thirty seconds.
- Mid-roll video ads interrupt the middle of the video. Mid-roll ads have lower abandonment rates than pre-roll ads because they only appear once the viewer is invested in the main video content.
- Post-roll video ads are the least used type of video ad. Because the viewer has no onus to complete them, they are more likely to be abandoned. However, because they are non-disruptive, post-roll video ads are less likely to be viewed negatively. Additionally, an effective post-roll ad is very likely to drive action. Since the viewer has already completed their initial goal of watching the main video content, they can direct their full attention to the post-roll ad.
Bumper ads
The bumper ad is a common type of linear ad distinguished by its brevity. Bumper ads typically run for six seconds or less and cannot be skipped. The format guarantees a view while minimizing disruption to the viewer’s digital experience.
Outstream ads
Outstream video ads appear outside the main content. An outstream ad on a video publishing platform will appear outside of the video player, while an outstream ad on non-video editorial content will appear outside the main text or image. Their placement allows them to catch attention without disrupting the user’s digital experience.
Outstream ads can be divided into three categories depending on their placement on the page: in-page, in-text, and in-banner ads.
- In-page ads are placed on a dedicated video player within a webpage.
- In-banner ads are placed on ad spaces on the webpage, such as sidebars and mastheads. Unlike in-page ads, which use dedicated video players, in-banner ads adapt to the aspect ratio of the banner.
- In-text ads appear within a piece of text, usually an article. They typically follow the article’s formatting and automatically play once the scrollbar puts them within the reader’s view.
Unlike linear ads, outstream ads supplement rather than interrupt a viewer’s digital experience. Because they do not come between the viewer and their desired action, outstream ads are easier to ignore than linear ads. However, they also feel less intrusive, increasing the viewer’s likelihood of engaging with neutral or positive feelings.
Sponsored ads
A sponsored ad is a type of ad that a collaborating individual, group, or company integrates within their main video content. Unlike other ads, sponsored ads don’t let you customize audience targeting settings. Instead, you only reach the viewers who engage with the specific video where your ad is published. The brand’s target audience is typically aligned with the publisher’s existing audience.
Sponsored ads are typically mutually beneficial deals between brands and content publishers: the brand leverages the content publisher’s existing audience, while the content publisher gets monetary compensation. Sometimes, this is a lump sum. Other times, it’s a cut from the profits the ad generates.
Interactive ads
Interactive video ads provide interactive elements, such as games, clickable links, and quizzes. By making interaction engaging, interactive ads increase the user’s likelihood of becoming invested. Retention drives more users into completing the advertiser’s desired action.
Mobile game ads are a common type of interactive advertising. Mobile game ads often consist of short gameplay videos and limited trials of basic game levels. The opportunity to try the gameplay firsthand compels many viewers to download the game.
Why use video ads?
Video advertising combines the typical benefits of video marketing with the reach of advertising. It promotes ideas creatively while guaranteeing views. Here are the important reasons.
It boosts reach
The main strength of advertising over other forms of video marketing is the guarantee of boosting brand awareness. You don’t have to wait for viewers to find your content, nor cater to the whims of search and feed algorithms for organic reach. You simply pay for placement to serve your content to your target audience. Studies even show that YouTube ads can reach 37.7% of individuals aged 18 and above, or 1 in 3 adults on earth.
It allows targeted content distribution
Many digital platforms, such as YouTube, Google, and Facebook, allow you to target specific audience segments. This allows for more purposeful and cost-effective ad creation. Common audience filters include:
- Age
- Gender
- Location
- Interests
- Life events
- Liked topics or pages
Because you can create content tailored to a pre-determined target audience, your videos stand a better chance of resonating. For example, Google surveys have shown that 59% of viewers find YouTube ads more relevant than ads on TV. By aligning with audience interests, you leave a positive impression.
It builds brand credibility
Ad spending proves a brand’s confidence in its products or services. It shows a willingness to invest in propagating the brand’s name. High-quality video ads further improve brand credibility by creating associations between the product and the refinement, trustworthiness, and authority of associated promotional content.
How much does video advertising cost?
Video advertisers need to pay for both the cost of production and ad placement. The added cost of ad space makes video advertising slightly more expensive than other types of video marketing. For example, research shows that small businesses spend between $101 to $1,000 per month on YouTube advertising.
However, the extra investment guarantees views from your target audience. You can pay a website to display your ads to your chosen audience segment or sponsor a content creator to integrate your ad into their video. The latter provides additional targeting and audience segmenting options, which also affects pricing.
To determine pricing for ad placements on platforms like YouTube or Facebook, brands typically start with a bid. This bid tells the platform the maximum amount the company is willing to pay for a specific action, such as a view, click, or conversion. The platform will then evaluate your bid against the actual cost of spreading your ad to determine a fair price.
Examples of bidding strategies include:
- Cost per mile (CPM, or cost per thousand impressions): CPM targeting pays the platform to maximize video impressions within a set budget. Impressions refer to video views, regardless of completion. Platforms allow cheaper bids for CPM targeting because impressions are less meaningful than completed views or conversions. It is effective for generating brand awareness.
- Cost per view (CPV): CPV targeting charges you for every viewer who watches your video for more than 30 seconds. You have to bid higher for CPV targeting than CPM targeting because the strategy tells the platform to work harder to reach the right audiences. However, the cost is offset by the fact that you never pay for views from disinterested viewers. This strategy is effective for improving brand consideration.
- Cost per conversion (CPC): CPC targeting tells platforms to accumulate as many conversions (such as landing page visits, purchases, or leads) as possible within a desired budget. Because it guarantees ROI, CPC targeting has the highest cost per action compared to CPM and CPV.
CPM and CPV targeting usually ask you to bid per action. For instance, you might pay $5 per thousand impressions or $0.10 per view. In contrast, the CPC pricing model involves a fixed payment, with the platform aiming to maximize conversions within that budget.
How to create effective video ads
While advertising is an effective way to improve reach, the negative connotations it carries can potentially hurt your brand. Understanding the common drawbacks of video advertising and why they occur can help you build strategies for mitigating consequences.
Stick to short-form content
Video advertising has become so pervasive in the digital landscape that most audiences have trained themselves to block out ads on instinct. Additionally, video advertising typically interrupts the audience’s regular content consumption, which can sour their feelings toward your brand. Research shows that 70% of users feel that ads disrespect their digital experience, while 91% refuse to purchase from brands with intrusive ads.
If digital content consumption were driving, ads should be billboards, not roadblocks. They should capture the audience’s attention without getting in the way of the destination. To minimize disruptiveness, keep videos short, compelling, and to the point. According to content strategy studies, videos shorter than 15 seconds are more likely to see user engagement than videos that are longer.
Invest in quality
Customers know that brands pay for ad space. If you’re confident enough in your content to pay for its proliferation, audiences will expect high production quality. Otherwise, viewers might think you lack the budget to represent your brand effectively. Poor advertising quality leads to a loss of trust in actual product quality.
Cap ad frequency
Negative feelings toward ads worsen with viewing frequency. According to ad fatigue research, viewers who run into the same ad 6-10 times are 4.1% less likely to purchase the advertised product than viewers who saw the ad 2-5 times. Additionally, viewers who encounter the ad more than 11 times are 4.2% less likely to purchase the product than viewers who’ve only seen it 6-10 times.
Preventing ad fatigue means limiting the frequency with which an ad appears. Platforms like Google Ads let you set frequency caps, which stop showing video ads to users who have exceeded your designated view limit.
Be strategic about audience targeting
If you’re launching a targeted ad campaign, target users whose profile, needs, and interests align with your brand’s goals. Relevance will increase your audience’s willingness to engage, thus reducing bounce or quit rates. Additionally, showing your video to a handful of specific users is cheaper than spreading your content to a wide audience.
Google, for example, lets you target users who have hit certain life milestones, such as graduations, engagements, or weddings. It also enables targeting based on their searches and interests. A software company seeking entry-level hires might spread its ads to fresh graduates who have shown interest in programming.
Understand audience values on a deeper level
Viewers are more likely to engage with ads that are relevant to their interests and values. However, if you attempt to appeal to their values without fully understanding them, you risk coming off as tone-deaf.
Take the example of Pepsi’s 2017 commercial Live For Now, starring Kendall Jenner. The video follows a group of activists marching for an undisclosed cause. It ends with model Kendal Jenner offering a can of Pepsi to an opposing officer, blatantly mirroring imagery from Black Lives Matter protests in years past. In effect, Pepsi sells itself as a solution to a serious and complex social issue that it cannot solve, which angered viewers and damaged the brand’s credibility.
[ Embed: https://www.youtube.com/watch?v=uwvAgDCOdU4
Caption: Pepsi’s infamous 2017 Live For Now commercial ]
Fortunately, preventing reputational damage is easy. All you need is adequate research on your target audience’s expectations. Dive deeper into your target users’ interests and values, and understand the reasons that drive their actions.
Avoid misleading statements
Another way to damage your brand’s reputation is to create misleading video ads. While a video ad with falsified or exaggerated claims might drive sales, the company’s inevitable failure to deliver on viewer expectations will kill any possibility of brand loyalty. The product falls short of its promises, shattering your brand’s trustworthiness.
An example is Sketcher’s commercials for its shoe line Shape-ups. While the deception encompassed more than just the brand’s video ads, the brand’s commercials and infomercials used animated infographics and live action to proliferate the lie that the shoe could tone muscles, promote weight loss, and improve cardiovascular health. In 2012, the Federal Trade Commission required the brand to pay a 40 million USD settlement for its unfounded claims.
Build a better brand image with SplitMotion
When properly executed, video advertising can be an effective tool for increasing brand awareness. To maximize the ROI of your advertising videos, you need to select the right target audience, cultivate a deep understanding of their interests, values, and buying habits, and create videos that align with their goals. Well-crafted video advertising strategies increase the likelihood of audience engagement, resulting in leads, conversions, and acquisitions.
Take your video advertising to the next level by outsourcing video production to SplitMotion. Our experts can translate your brand into a marketable visual identity that generates leads and drives sales. We cover every step of the video production process, from scripting to shooting to editing.
