Even at this year’s NewFronts, there was much success seen for digital video publishers. Advertisers called for more and the NewFronts added another week to their program – making the event nine days instead of five. It’s clear that digital video is thriving, while banner ads are flailing.
Now, as the CEO of a digital video brand advertising provider, I’m probably biased, but here are my arguments:
Banner ads are a thing of the past
Banner ads are dying, and have been for quite a while. Don’t get me wrong, banner advertising is still tremendously widespread, but evidence suggests it is a much less effective tool to attract Web visitors’ attention and build brands.
In its 2013 report, “Global Trust in Advertising and Brand Messages,” Nielsen reported that only 42% of people (globally) trust banner ads. We’ve even begun to see the amusing term “banner blindness” applied because people, having become numb to the incessant advertisements on their screens, increasingly overlook banner ad content.
Now, banner ads do have their place in the bigger scheme of things, but in terms of effectively capturing and holding consumer attention as they spend time on a multitude of devices, they’re not the right tool.
Studies and anecdotal evidence suggest that video advertising, and in particular, pre-roll video, is a far superior ad unit type across all brand metrics. According to a 2013 eMarketer study, banner ads are currently only accounting for 22.6% of ad spend, while digital video accounts for 9.7%. By 2017, those numbers will shift to 30% and 15% respectively – suggesting a major move away from banner towards video. A fact supported by a recent IAB survey which reported that "...advertisers anticipate spending 17% more on digital video in 2014 compared with 2012.
Marketers will want to take a hard look at some of the recent studies that document better brand recall and engagement with video ads over banner.
Video advertising is king
In clear contrast to the deterioration in impact of banner ads, video advertising is well positioned to continue its rise to prominence and effectiveness with consumers, particularly through the use of interactive video ads. comScore’s 2013 "Digital Future in Focus" report addresses the video ad opportunity squarely, noting “with the demand for high-impact video advertising exceeding the available inventory, look for the online video market to continue its strong monetization momentum – particularly as targeting improves.”
Studies have shown that video advertising works effectively across devices, rather than just on specific screens. Purchase considerations and intent rise the more screens an ad is seen on, according to a recent YuMe and Nielsen study on multiscreen video reach. Banner ads just aren’t cutting it when it comes to encouraging consumers to take that action step in the purchase process.
Overall market size is growing quickly, as well. eMarketer estimates that worldwide digital ad spend will reach $137 billion in 2014 (that’s a nearly 15% jump from 2013). According to a recent IAB study, budgets going toward the digital video side of that spend “will be funded by shifting money away from TV -- particularly away from broadcast and cable.” Additionally, “three out of four advertisers (75%) foresee original digital programming starting to become as important as TV programming within the next three to five years.”
Choosing the most effective advertising channels to raise awareness and drive consumer action is part art, part science. With consumer attention fragmented across screens, content sources and technology platforms, the savvy marketer needs multiple tools in their tool chest. The banner ad tool is fairly oxidized. Digital video ads, particularly those powered by strong back-end data analysis platforms, are proving to be one of the most cost-effective options available to effectively capture the ever-fleeting attention of consumers.