Online video advertising trumps TV commercials, study finds

Heralding 2013 as the “breakout year” for online video advertising, a recent survey finds Canadian advertisers are increasingly concentrating their marketing efforts on the Web, instead of on TV.

Online video advertising firm BrightRoll Inc. and the Interactive Advertising Bureau of Canada released that finding from their third annual report on June 5. They polled more than 300 Canadian advertising executives to get a feel for where they believe digital advertising is headed.

They found 37 per cent believe online video will be the top medium for spending in online advertising. Another 69 per cent of respondents found digital videos were at least as effective, if not more, than using TV to reach consumers.

comScore Inc., a digital analytics company, reports 92 per cent of Canadians on the Web are using it to watch videos online. To keep up with these consumers, Canadian advertisers are spending more on digital videos, dishing out 42 per cent more of their money than in 2012. About half of the advertisers polled said their clients also asked for digital videos in 2012, up 22 per cent from just two years ago.

“Last year, when we were meeting with Canadian agencies, they were really starting to figure out where to fit,” says Daryl McNutt, senior vice-president of research and marketing at BrightRoll. “When most people think video, they think television … [Canadian advertisers] now understand what it means to buy an audience instead of a show.”

While TV traditionally has been the embattled site of a turf war between advertisers seeking air time, online video has several advantages that TV can’t hope to match, McNutt says. For one thing, online advertisers can now target audiences across multiple screens and devices to raise a brand’s profile.

(Image: BrightRoll and IAB Canada)
(Image: BrightRoll and IAB Canada)

Online video advertising also relies heavily on what’s called programmatic buying, where advertisers can bid on a commercial spot just before a YouTube video starts playing. For example, if a woman between the ages of 25 to 34 were to watch a YouTube video, a call would go out just before her video plays, seeking any advertiser who would like to bid for a commercial spot.

“You can go ahead and you’d be buying at the time when an ad call is available,” McNutt says. “This is the market value at the time, so you’re always buying at the most efficient price. You’re most efficient with your media campaigns … This all happens in milliseconds.”

And while some advertisers choose to air the same content online as they do during TV commercials, that’s still effective, he says. One important distinction between online videos and TV commercials is that online videos encourage user engagement.

“[Advertisers] always use this term, like lean forward or lean back. They consider TV as ‘lean back’ as a term, and ‘lean forward’ means that you can actually now interact with the video online,” McNutt says. “You want to keep that brand perception all the way through, but you can now add components to it, so folks can interact with your brand, especially a retail brand or a lifestyle brand.”

Canadian advertisers adopted digital video marketing a little later than their American counterparts, McNutt says. But this year, Canadian advertisers have vaulted way ahead of their neighbours south of the border and are now moving “at light speed” with this trend.

The push to digital video advertising should continue for at least the next year or two, he adds.

“Will it level off? Possibly, but going cross-screen and mobile and tablet connecting to TV, it’s going to be awhile.”

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Candice So
Candice So
Candice is a graduate of Carleton University and has worked in several newsrooms as a freelance reporter and intern, including the Edmonton Journal, the Ottawa Citizen, the Globe and Mail, and the Windsor Star. Candice is a dog lover and a coffee drinker.

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