The State of Online Video Advertising 2015

March 31, 2015

Advertising agencies that specialize in online video enjoyed a pretty solid 2014. Not only were sales up, but the most talked-about advertising videos all started online. The medium gives creatives the freedom to push their ideas farther than TV ever did. So what’s ahead for 2015? More of the same, we’re pleased to say. In the online video space, agencies need to produce work that people want to see, that they’ll watch over and over again, and share with friends. That high standard is driving agencies to create outstanding work—sometimes with Hollywood-sized budgets, sometimes on a shoestring.

The Year That Was

  • In 2014, it seemed like every other blog post or article was about “programmatic” advertising. By the end of the year, half the advertisers still didn’t know what “programmatic” meant and the other half were sick to death of hearing about it.
  • Advertisers couldn’t get enough of live events in 2014.
  • For many, the endgame in online video advertising is reaching parity with TV advertising, so that ad buyers see all screens as the same and spread their campaigns across online and TV channels equally. But online ads should cost more, they add, since they deliver demographic targeting that TV will never be able to touch. These idealists saw a little progress in 2014, but the online video ad world is still very much a kid brother to TV. Before online gets the same kind of ad spending as TV, it will need to get the same kind of viewership.
  • Measurement will also need to advance before online media sees parity with TV. Much of the discussion in 2014 was about how to measure online viewers. Online video supporters point to the advanced demographics that online offers and wonder why anyone would advertise anywhere else. But the realist sees that TV has unbeatable reach.
  • Mobile viewing is still a small share of total video viewing, but by the end of the year tablet and smartphone views counted for about 30 percent of all video starts, and that raises eyebrows. Mobile is attractive to advertisers because, unlike with TV or even desktops, it’s all but assured that only one viewer will be in front of the screen and will be undistracted. That lets advertisers better target ads. In another year, mobile views will make up about half of all video starts, and then mobile could become the preferred mode of online video advertising.
  • In April, YouTube introduced Google Preferred, a program that offered advertisers the cream of YouTube inventory. The idea is that YouTube reserves ad slots on the top 5 percent of its shows in multiple verticals, and advertisers can buy into this highly selective inventory. When it was introduced, it drew a few chuckles from the audience. After all, even 5 percent is a vast amount, considering how many views YouTube gets. And why are some slots judged as more desirable? Nonetheless, YouTube announced in October that Google Preferred slots had sold out.
  • One hot topic, especially at the end of 2014, was ad viewability. The Media Rating Council (MRC), working with the Interactive Advertising Bureau (IAB), introduced the first viewability standards in June. Video ads are considered viewable if 50 percent of their pixels are on screen for 2 continuous seconds. The standard seems low, but the MRC says it isn’t about making sure an ad was seen, but ensuring it has the potential to be seen. Look for 2015 to be a year of transition for viewabilty, when ad platforms gear up to track the new standard accurately.
Google Preferred

In April 2015, YouTube introduced Google Preferred, which gives advertisers access to ad slots on the top 5% of shows in multiple verticals. By October, all Google Preferred inventory had sold out.

Online Video Advertising in 2015

How will the online video ad world change in 2015? We needed to call in an expert for the answer, and there’s only one person for the job: David Hallerman, principal analyst for eMarketer. He’s spoken to the experts, he’s crunched the numbers, and here’s what he had to say. On the nearly ubiquitous topic of programmatic selling, Hallerman has some advice for the confused: Just remember that another word for “programmatic” is “automatic.” It’s computer-automated ad buying: Input your criteria and automatically get the desired ad slots. It’s automatic, but only to a point.

  • How does the buyer know if viewers are paying attention? Viewers could walk away or get a snack—there’s no way to know. Desktop viewers could click another tab while an ad plays, so that an above-the-fold play isn’t actually viewed. More accurate metrics will help solve the problem.
  • “Even though tablets are owned by fewer people, there’s more money going to be going to tablets because they’re great media consumption devices,” Hallerman says. “Kind of like TV, people are consuming content and they’re watching videos of different sorts, and it works well for ad placement.”
  • In terms of metrics, to have ad placements with sure viewability where the ad is viewed for more than 3 seconds or the ad is viewed by a real person and not a bot or the ad is viewed because it’s top of the screen and not running below the fold will become an increasingly important metric
  • There’s still more additional dollars flowing to TV than digital video.
  • TV ad money is safe in the short term and it’s safe in the medium term, as well. Go any longer than that and the two areas will be so blended that the distinction won’t matter anymore.


Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.