• by Alex McIlvenny , Op-Ed Contributor, June 26, 2018

Video is an incredibly effective digital marketing medium -- by its very nature creating more emotional cues to engage users than other digital display ads -- and is now the UK’s largest display ad format.

The IAB’s latest study reveals that online video ad spend exceeds GBP1.6 billion in the UK, and accounts for the majority of display growth, with investment in video rising 47% year-on-year while spend on banner ads continues to stagnate. But these top-line figures hide a more complex picture within the realm of video advertising. While recent formats such as native outstream or in-feed are accelerating, traditional pre-roll video ads are losing favour with users and advertisers alike.

With 40% of internet users in the UK expressing a dislike for online advertising, it is vital to put the user experience first, so what is it about pre-roll and other in-stream formats that are missing the mark and why are advertisers shifting budgets to native outstream?

The bell tolls for pre-roll

Traditional in-stream video ad formats such as pre-roll, mid-roll and post-roll are losing ground due to their disruptive nature. Users become annoyed and frustrated because they have to sit through these types of ads to get to the video content they want to watch. Magna Global research reveals that almost two-thirds of users skip pre-roll ads where possible, and three-quarters of these do so out of habit without waiting to see if the ad content is relevant or interesting. What’s more almost 30% of ad blocker users globally say they make use of the software to avoid having to see ads before video content.

In-stream video isn’t dead yet. In 2017 the format still accounted for 42% of total video ad spend, but this is down from 55% the previous year, showing a significant decline. Facebook CEO Mark Zuckerberg has famously been against pre-roll video, but the platform is now experimenting with the format to see how it can be used to monetise some types of content.

At the same time, YouTube and SnapChat are moving to short, unskippable pre-roll ads in an attempt to generate in-stream revenue with minimal user disruption. But while various content platforms look for ways to make in-stream video ads more palatable, a far better alternative is surging ahead in the form of native outstream.   

Viewers scream for outstream

While pre-roll is taking a fall, the rapid growth of video advertising is being driven by less intrusive native and outstream video formats and such like, which now accounts for 56% of video ad spend. Rather than being attached to video content, and running in the video player before, during, or after that content, native and outstream video ads stand on their own and can be used to monetise non-video inventory.

Outstream includes native video iterations that consistently match the aesthetics and tone of the editorial environment and blend seamlessly with content. Native video is focussed on delivering a positive advertising experience without disrupting users, making it an ideal way to engage audiences and drive results. Unfortunately, not all outstream video ads are native. Non-native formats such as auto-playing videos with automatic sound on are still disruptive to users and have slightly dented the reputation of outstream, with The Coalition for Better Ads deeming them beneath the threshold of consumer acceptability. Advertisers looking to adopt outstream video should focus on native video formats to achieve the positive, non-intrusive experience that users demand.

The native video superhero

By harnessing two thriving categories of advertising -- video and native -- advertisers can make use of a single digital super-format that connects emotionally with consumers without disrupting the user experience. With its ability to adapt seamlessly to its surroundings, native brings out the best in video, allowing it to engage users in a relevant, accepting environment. This is particularly relevant to smartphone advertising where unique user demands mean that 81% of ad spend already goes to either video or native advertising, and outstream already accounts for 68% of total video spend. 

Video advertising is enjoying a meteoric rise as advertisers understand its unique ability to engage audiences, but to ensure their ads are a welcome bonus rather than an annoying obstacle, advertisers need to consider formats carefully and ensure they tell a story and not just push a sale. Pre-roll and other disruptive in-stream formats are gradually bowing out and native outstream is perfectly placed to take the video advertising crown.