• by Mark Walsh  @markfwal, October 23, 2008

Madison Avenue is increasingly turning to neuroscience to refine the art of crafting successful ad campaigns. The Nielsen Co. jumped into the field earlier this year by investing in Berkeley, Calif.-based research firm NeuroFocus, which applies neuroscience to advertising research.

Now Google is applying "neuromarketing" to video advertising. In a study released Thursday, Google and MediaVest used NeuroFocus findings to show that overlay ads appearing in YouTube videos grab consumers' attention and boost brand awareness.

YouTube-owner Google has championed overlay ads--which appear in the lower third of video screens--as a less intrusive alternative to pre-roll ads. But the format has failed to gain much traction with advertisers, and earlier this month Google announced it would begin running pre-, mid- and post-roll ads with the launch of full-length videos on YouTube.

With revenue from YouTube ads falling short of company expectations at an estimated $200 million this year--mostly from display ads--the pressure grows to find new ways to monetize the Web's largest video site.

Through the overlay study, Google is clearly trying to make the case for the format to brand advertisers that may be skeptical. "Overlay ads are a format used primarily for branding campaigns, so measuring click-through rate is not the most effective way to measure success," said the company in a statement.

To that end, the NeuroFocus research conducted in May looked at the reactions of 40 people to YouTube InVideo overlay and companion banner ads from a cross-section of MediaVest advertising clients.

The firm used biometric measures such as brainwave activity, eye-tracking and skin response to gauge the impact of ads. Based on criteria including attention level, emotional engagement and memory retention, it then comes up with an overall "effectiveness" score for ads.

The study revealed that viewers found overlays "compelling and engaging," generating high attention and emotional engagement levels across different brands and types of video. On a one to 10 scale, the ads scored a 6.6 in effectiveness, which is considered showing "a high effect."

The combination of overlays with companion banners also grabbed users' attention more than banner ads alone, scoring a 6.6 compared to a 6.3 for just banners. The overlay-display combo was also found to improve brand response over banners alone, based on study participants' brainwave activity.

Yaakov Kimelfeld, MediaVest senior vice president for digital research and analytics at MediaVest, said the study "will be instrumental in showing that overlays actually work." While advertisers may still be more comfortable with pre-rolls, which approximate TV commercials, Kimelfeld noted that "the interruption model is going away, even on TV."

The Google/MediaVest study did not compare overlays with pre-roll ads, but he suggested that could be a subject of future research. Kimelfeld added that the overlay ad study was the first time MediaVest has applied neuroscience techniques to advertising research. "It's a new tool for testing new formats," he said.