How to Measure Online Video Ad Success
This article appears in the 2008 Streaming Media Industry Sourcebook, which is free with a subscription to Streaming Media magazine. Click here to register .
"Half the money I spend on advertising is wasted," observed pioneering retailer John Wanamaker more than a century ago. "The problem is I don’t know which half." That’s been the advertiser’s dilemma—until now. Wanamaker paid for unseen newspaper ads, and broadcast TV advertisers pay for commercials that are TiVo’d into oblivion. Online video advertisers, on the other hand, know precisely how many viewers saw their ads, how long they watched, and how many wanted more information about the advertised products and services. When an automotive advertiser knows that a viewer spent all afternoon browsing through new car websites and then chose to watch an entire 3-minute promotional video touting his product, the advertiser knows that particular ad dollar wasn’t wasted.
Targeting abilities and precise metrics have long been the promise of online video advertising. However, only recently has there been enough critical mass to capture the interest of major agencies and advertisers. Today, 72% of internet users watch online video, up from 62.8% in 2006. Research firm eMarketer predicts that by 2011, 86.6% of the US internet population will consume online video. Agencies and advertisers are responding accordingly—Forrester Research says that online video ad spending will reach $775 million in 2007, growing 89% from $410 million in 2006, and it’s expected to approach $5 billion by 2011. Online video ad spending is also growing as a percentage of total internet ad spending, up from 2.6% in 2006 to 4.2% in 2007. At some point in 2010, one in every 10 dollars spent on internet advertising will go for video ads.
What Counts, What Doesn’t
With all the money poised to flood the world of online video, there is still no established standard under which online video ads are delivered. When it comes to allocating online video ad dollars, advertisers are faced with a widening range of choices. While TV audiences have come to expect clusters of 30-second spots before, during, and after programs, online viewers are subjected to a hodgepodge of preroll, midroll, and postroll video ads in 10, 15, and 30-second lengths, streamed in a variety of bit rates and window sizes. Advertisers can choose between in-page and in-stream ads, and innovative options such as overlays, bugs, roadblocks, expandables, telescopes, and video floating ads are becoming increasingly common (see the sidebar "An Online Video Ad Glossary" for definitions of the various ad types). Every content publisher has its own recipe for combining platforms, players, bit rates, and ad formats. To the extent that they result in distinct user experiences, these various practices offer different ways to achieve and measure ad success.
One of the key metrics used to judge the effectiveness of rich media ads has been impressions. The Interactive Advertising Bureau (IAB) has defined a video impression as occurring "after the initiation of the stream, post-buffering … when the ad itself begins to appear on the user’s browser, closest to the opportunity to see." However, "opportunity to see" may not be as relevant with online video ads as with other rich media ads. (Note that the line between some interactive Flash ads and online video ads can often be blurry.) Interaction, i.e., how the user responds to the "opportunity to see," is becoming recognized as a more significant metric. "Interaction is very important," says Ari Paparo, VP for rich media and emerging technologies at DoubleClick. "If you think back to high school, you don’t see a diagram of a frog … you dissect the frog, because interacting with the frog is a great way to learn anatomy. It’s a similar situation when you’re talking about brand advertising. If a person does something with your brand—plays a game, reads a synopsis of your film, whatever it is—they’re dramatically more likely to remember and associate the brand attributes you’re looking to promote."
Online video offers myriad ways to measure interaction. With tracking pixels (also referred to as pixel tags, action tags, web bugs, beacons, or transparent GIF files), publishers and ad servers can collect scores of metrics, including how long a self-initiating video typically played before users stopped it or left the page, how many users clicked to start a user-initiated video and how much of the video they watched, which videos users typically watch to completion, and how many users clicked within a video to obtain more information about the advertised product or service. Publishers can even track how often users muted the audio or clicked to watch the ad in full-screen mode. Roadblocks or companion ads can themselves incorporate rollovers, click-throughs, and other interactive behaviors that can then be recorded as additional metrics. John Vincent, CEO of Eyewonder, notes, "Our reporting system can go up to 9,000 reported metrics." With so many metrics available, success is in the eye of the beholder. Some advertisers value interaction volume (i.e., how many unique users watched an ad and for how long), while other advertisers focus on interaction depth (i.e., how many different ways did users interact with the ad). As yet, there is no widely accepted "interaction quotient" metric.