True or false: Online video ad campaigns are better for brand advertising than performance goals?
While the common wisdom says true, the common wisdom is wrong. That finding comes from a white paper on end-of-year buying strategies created by demand-side platform (DSP) AppNexus.
According to the white paper, AppNexus’s data shows that video click-through rates (CTRs) were dramatically higher for video ads than for banner ads all throughout Q4 2015. While banner CTRs hovered barely above 0.1 percent for September through January, video CTRs were never under 0.4 percent and nearly hit 0.7 percent.
The lesson is that advertisers should give video ads a shot for their performance goals, but they should measure video ads using the same performance metrics that they use for other media.
Is there a cost premium in leaning heavily on video? Yes, but it could be worth it. While the cost-per-click for video is 33 percent higher on average than banner, AppNexus suggests a strategy bullish on video could deliver.
“As video targeting becomes more programmable, performance marketers will be able to further optimize their video campaigns for views and clicks,” says Anna Gunther, client insight analyst for AppNexus. “We expect video advertising to become the preferred format for marketers who prioritize user engagement, and recommend publishers explore new types of video formats like outstream to capitalize on this spend.”
The paper includes a wealth of buying advice. In the U.S., conversion rates drop sharply between December 22 and the end of the year, so limit all unnecessary ad spending. Brand advertisers should look for bargains in early January, when CPMs take a sharp drop after the holidays.
Conversion rates are surprisingly low on Black Friday and Cyber Monday in the U.S., the paper says. If advertisers have online sales that absolutely must be promoted, “be vigilant in targeting only high-performance inventory and aggressive in bidding enough money to secure those impressions.” The danger to avoid is spending big money on ads that don’t direct shoppers to your promotions.
For more lessons on creating an end-of-year buying strategy, download “Our Gift to You This Holiday Season: Unwrap and Reveal Buying Strategies for Q4 2016” for free (registration required).