Pre-Roll Ads Get More Bang For The Buck Than In-Banner, Study Finds

Based on click-through rates, pre-roll video ads are 8-25 times more effective than in-banner ads, according to new data from Web video company BBE.

The study analyzed data from over 2 billion impressions, and virtually all of the online video ad campaigns -- both streaming pre-roll and in-banner -- that ran on BBE's network in 2008.

"Finding average click-through rates of 1.44% draws a real distinction between in-stream and in-banner ads," said Matt Wasserlauf, CEO of BBE -- formerly Broadband Enterprises.

Wasserlauf noted that the study was data-agnostic because the company's clients asked for both streaming and in-banner ads.

BBE's goal was to find out which format brought advertisers the most bang for their buck, based on the most effective measurement the company has -- click-through rates.

According to Wasserlauf, streaming ads may be more effective because they more closely resemble what viewers are used to seeing on TV: ads that are associated with desired content and have to be watched before viewing the content -- thereby engaging the viewer more effectively.

Ad network Tremor Media recently found that pre-roll ads are highly effective when paired with the "right content." A study of more than 100 campaigns with nearly 65 million pre-roll impressions showed pre-roll video completion rates of around 80% for both 15- and 30-second streaming video advertising.

Similarly, Break Media and video ad technology provider Panache recently found that completion rates for pre-roll video ads approached 90%, and click-through rates averaged 10%.

Furthermore, according to a recent Ipsos MediaCT study, consumers are showing an increased willingness to watch ads in exchange for free online video content. A full two-thirds of the respondents said it was reasonable to show ads in front of professionally produced content such as music videos, news and sports clips.

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10 comments about "Pre-Roll Ads Get More Bang For The Buck Than In-Banner, Study Finds".
  1. Shaun Farrar from DIGITAS , June 18, 2009 at 8:12 a.m.

    Click-rates tell you nothing. There is typically no correlation with back-end conversion rates or brand lift with CTR (in fact, there is usually an inverse relationship between them). I wish CTR would die as a metric. It continues to hold our industry back. If you compare the interaction-rates to the in-banner video they will likely be higher than the useless CTR metric.

  2. Jason Krebs from Maker , June 18, 2009 at 9:54 a.m.

    Shaun Farrar is the ShortTail Media "Hero of the Week."
    ~J

  3. Adam Tuttle from Addroid , June 18, 2009 at 10:41 a.m.

    Shaun,

    I'm curious how you can have any (measurable) back end conversion without the click? Sure "view throughs" are somewhat of a measurement but they are not very accurate unless a single source is controlling the delivery of the ad for a single product or service. Otherwise they are an impossible to measure accurately.

    Perhaps for branded advertisers there is a way to measure "lift" beyond the click but every other advertiser is looking for attributable results. It’s pretty hard to have results without traffic. And pretty hard to get traffic without the click.

  4. Thomas Kurz from EFP , June 18, 2009 at 10:46 a.m.

    I have to agree with Shaun Farrar on this. Using click-thru rates as a methodology for measuring the effectiveness of static ads is a fools errand. And I feel it hurts brand managers, ad agencies and publishers to continue this need to validate the effectiveness of campaigns based on a metric that fails to properly measure how people engage with brands online.

  5. Jamie Wells from Amazon , June 18, 2009 at 10:58 a.m.

    Um... "Bang for the Buck?"

    Agreed that CTR is usually meaningless.. but before we get there, it doesn't appear this data been normalized so as to recognize that pre-roll is usually more expensive than in-banner. How do the numbers shake out when working in cost via a CPC analysis?

    Again, not that it matters much. I'm not aware of too many advertisers that are in the "click generation" business! :-O

  6. Eric Porres from Rocket Fuel Inc , June 18, 2009 at 2:38 p.m.

    The devolution of performance discussions into "CTR" performance is a sad and sorry business. Major public studies, notably Starcom's Natural Born Clickers ('07... Starcom, Mediavest, Tacoda, comScore), comScore's recent "Whither the Click," and today's OPA research news, all debunk CTR. The folks at BBE really missed the mark here, which is too bad.

    As for Adam Tuttle's comment, clicks may provide some sense of immediacy for reporting, but in the long term, clickers are not necessarily stickers, and as ads evolve to be destinations in and of themselves, we may get to a CTR of 0.00%, but that's OK. Proactive searching "in the moment" may warrant CTR as one of the attributes in an LTV model, but if I'm not immediately in the moment for product X, brand Y, or service Z, then ads (whether they be behavioral, contextual, semantic, etc.) serve as an invitation to engage or a reminder to not forget, and those imprints subconsciously affect consumer behavior. Yahoo and AC Nielsen show time and time again that exposure to online advertising can positively affect offline sales without any correlation to CTR.

  7. Eric Porres from Rocket Fuel Inc , June 18, 2009 at 3:23 p.m.

    Krebs, do I get #2 hero of the week award or do you only give out one per week?

  8. Jason Krebs from Maker , June 18, 2009 at 4:56 p.m.

    It's like the Stanley Cup, one person at a time.

  9. David Simutis from Rey Interactive , June 18, 2009 at 7:12 p.m.

    So if they're 8-25x more expensive and get a CTR of 10x the average of .14%, how is that more bang for the buck?

    Not to mention we see interaction rates in the high double figures for rich media ads with video...

    Death to CTR.

  10. Tommy Liu from Supercool Creative , June 19, 2009 at 5:04 p.m.

    Let's take the article for what it is, an observation of statistics done by BBE whatever the dynamics of its measurements are. I'm sure if you do some research for statistics in favor of in-banner ads you can find it, but it all comes down to knowing what the criteria are. This article is in favor of my field, so I'll be referencing it on my company's blog. Thanks Gavin.

    Supercool Creative > http://www.supercoolcreative.com > http://www.gettingspotted.com - blog