The Truth About Click-Through Rates In Video Ads

• by Daisy Whitney , Op-Ed Contributor, July 5, 2012

Online video ad network AdExcite is betting interstitial video ads are more appealing to consumers than pre-roll ads and it’s got some recent campaign data to back up that claim. AdExcite is hanging its hat on its “slider” type of video ad format that delivers short video ads next to text or other content on more than 1,000 websites, such as GotchaMovies.com, Examiner.com and others, collectively reaching more than 75 million uniques a month.

If that sounds like a video display ad, well, yes it is. And the engagement is much higher than a typical banner spot. A recent AppleBee’s campaign netted a 1.76% click-through rate, a White Castle effort generated 1.39%, and a Carl’s Junior push delivered 1.49% interaction rates, AdExcite said.

To be sure, there’s plenty of debate on whether interaction rates or click-through rates are even relevant for video ads. After all, video ads are usually brand-building work for marketers. Even so, I was intrigued enough by the consistency of these relatively high click-through rates to dig a little deeper. (AdExcite also said its Activision Call of Duty MW3 spot generated a 4.03% click-through rate in a custom ad tailored to gaming audiences, while GameStop’s Ghost Recon logged a 2.93% interaction rate for a similarly custom targeted run.)

The completion rates for the slider video spots are ranging from 40% to 70%, said AdExcite CEO Phil Banfield. That compares to an average completion rate for pre-rolls in the mid-60% range, putting the formats on par.

However, the AdExcite spots feel a bit like auto plays to me, and hardly anyone likes auto plays. But, the ads all have visible close buttons and viewers can easily “defect” within about four seconds. Plus, only one ad per user is served up in a 24-hour period, which is a pretty decent frequency capping.

Banfield points out that the ads don’t “cover” up the content - an article, for instance - that a user is reading, but run alongside it instead. “We see ourselves as the antidote to low-quality in-banner video ads, which are dragging down industry CPMs and performance. As pre-roll inventory becomes tighter and tighter, our ad unit can meet the excess advertiser demand with strong performance and thus plays a valuable role in the spectrum of options for video advertising.”

Banfield said AdExcite is serving up about 150 million impressions per month and the CPMs are about 80% to 90% of the CPMs for a standard pre-roll.

The company started in 2009 and is growing revenues by 10% to 20% each month with advertisers from Chevy to Hilton to Relativity Media buying the spots.