Are Online Video Ads an Opportunity – or a Dead End? | Koeppel Direct

Are Online Video Ads an Opportunity – or a Dead End?

online video advertising

As some of the biggest publishers in online media gathered for the Digital Content NewFronts conference, it seems like reaching consumers through online video is the best bet for publishers and media buyers as well.

But what if all that advertising is being avoided, skipped or ignored by the target audience? 

Online video offers a tempting opportunity for advertisers. Unlike traditional channels, with online video advertising, advertisers can get very specific about their intended audience and just pay for space in front of specific demographic groups. They could say “I want to reach women in their late 30s that moved within the last six months” and then pay for a certain set of impressions in front of that audience.

An efficient process. The process is efficient, and because of its efficiency online video ad sales totaled $2.8 billion, which was twice as much as what was spent in 2010. It is impressive growth for this new niche in advertising, but didn’t come close to the $74.5 billion spent on television ads in 2013. However, eMarketer estimates that due to the double-digit growth pace in online advertising we could see spending as high as $8 billion by 2016.

But purchasing the space in front of a target audience online doesn’t mean that a company’s exposures will lead to sales – or even exposure in front of humans. Many times, online video advertising is either buried too low on pages, run in tiny (and easily ignored) video players or run simultaneously with other video ads on the page. By some estimates, more than half of online video ads are not seen.

Starting in 2011….Video ads have been attracting attention (and dollars) steadily and as big name brands started heavily investing in 2011, others followed suit. At that time, cable and network television began moving more content online and video-focused websites, like Hulu, became more popular. But marketers are beginning to realize that video ads aren’t all that they promised to be.

Ad sales for online video advertising are growing but engaging consumers where they are can be challenging. The first hurdle is that as online video ads become more prominent, the “ignore” factor grows as well. Consumers being bombarded by lots of video ads are more likely to actively take steps to tune them out – from clicking “skip” to browsing with muted volume.

How to track? Tracking where these ads are being placed, and how they are displayed, is also another problem. While clients and their marketing companies are willing to spend on video advertising, placement companies have a hard time proving where those ads are being displayed – and if they are reaching the intended audience. Insertion orders for quality ads for a specific audience may produce views, but not results, because the videos are being run in a tiny screen, on auto-players and on less than appropriate websites.

In addition, since video ad sales are determined based on exposures, clever hackers have created bots that can easily increase impressions on ads without a human ever seeing them. For example, in April tech company TubeMogul reported that it had discovered three new botnets. Between the three, they were creating more than 30 million fake video views per day – which totals $10 million per month. Shockingly, botnets and similar “faked” impressions are completely legal under current legislation.

Prime real estate for videos. Finally, there’s the crux of the problem with online video ads – there’s a limited amount of prime real estate to display videos. When these premium spaces fill up, media buyers often turn to video players on sites with less competition. As video advertising has become more in demand over the last few years, thousands of websites embedded video players. While this increases the total number of spaces for online advertisers to show their videos, it’s resulted in a market with very disparate opportunities.

As a media buyer approaching the situation, you’d try to get as many brand impressions as possible, but great sites with large video players have limited time. As a result, you might find yourself placing the ads on less popular sites, and stretching the rules on what you expect (i.e., autoplay). Or you may reach for an exchange to match you with sellers, but you may not know where the ads are running. The result is wasted ad dollars and less than impressive results for clients.

In an industry with a potential of $8 billion in sales in the coming years, these problems can darken sunny skies. However, viewability is becoming part of the conversation about online video – which can lead to the creation of official industry standards and better overall results.


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