Pre-Roll Video Ad Prices Dip, Large Inventory Blamed

Pre-roll-video-ads-ATraditional TV costs per thousand may still be climbing -- but that isn't the case for digital pre-roll video ads, in part due to increased inventory.

Current pre-roll video advertising -- perhaps the biggest piece of the digital video category -- is down slightly at $8.18 CPMs from an $8.83 CPM during the first half of 2012, reports real-time video ad platform TubeMogul. The dip occurs when inflation has been bumping along at 2.5% per month.

Most of that is due to heavy inventory, says the company.

The number of daily pre-roll video ads available for real-time buying averaged 331 million ads available per day in October. There has been a monthly inventory growth rate of 7.3% in 2012, says TubeMogul.

Digital video completion rates -- an increasingly important measure for digital advertisers -- continue to grow with certain formats. Top-level (tier one) sites have the higher competition rates for 15-second commercials. In the third quarter of this year, nearly 85% of viewers now watch an entire ad on top sites. This is up from nearly 82% for the first half of the year.

Research also reveals that watching a completed video means better recall and brand association. There is a 20% rate of message association for those who watch a completed message, versus 8.3% for those who don't watch a completed video message. General awareness has improved to 6.9% from 3.5%.

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7 comments about "Pre-Roll Video Ad Prices Dip, Large Inventory Blamed".
  1. Steve Smith from Discovery , December 6, 2012 at 3:20 p.m.
    Wow 8 bucks...I see more like 25 bucks
  2. Domenico Tassone from Viewthrough Measurement Consortium , December 7, 2012 at 8:30 a.m.
    It's about time. Video inventory CPMs have been in a bubble, living off the review-view mirror GRP thinking for several years now. Perhaps advertisers and agencies are wising up. Bragging about video completion rates is kind of a red herring. A better way to frame-up performance is is to focus on the measurable outcomes, e.g. What is the response (clicks and viewthrough)? Does it really work for the advertiser? Can it deliver effective reach and frequency? Does it offer a good ROI? The recall and awareness is interesting and consistent with what I've seen for video's impact on branding.
  3. Mike Einstein from the Brothers Einstein , December 7, 2012 at 8:59 a.m.
    @Steve, I think the $8.18 is an average, which means your $25 is offset by two poor schmoes making absolutely nothing!
  4. David Burch from TubeMogul , December 7, 2012 at 1:45 p.m.
    Steve, I can confirm the $8.18 is a broad average. To your point, we will break out the averages by content quality next quarter.
  5. Rusty Winter from Online Advertising Jacksonville , December 7, 2012 at 1:57 p.m.
    Our CPMs have a really wide variation depending on the category and inventory we tap into. I dont mind seeing them go down a bit, but video should carry a pretty good premium over static.
  6. John Grono from GAP Research , December 7, 2012 at 4:44 p.m.
    Domenic, you seem to assume that all online video is response based. Is that not consigning online even further to being a DR medium. There is only so long that online can trade at the bottom of the funnel.
  7. Domenico Tassone from Viewthrough Measurement Consortium , December 8, 2012 at 9:10 a.m.
    John, actually that is not at all what I am suggesting. Video could certainly be used for online branding purposes - in the right hands. However, this requires a solid measurement strategy based on facts. Digital can do better than retrofitting scaled media measurement into a highly targetable medium for upper funnel tactics. What is an assumption is that digital video should be used like TV simply because sellers say so and after they both use video...please. Of more concern is the lack of transparency about incented "video completes." More here: http://www.adweek.com/news/technology/aol-uses-incentives-boost-video-biz-145569