By Jerem Febvre
Changes in online video are usually subtle, but if you went off the grid in 2014 and just returned now, you’d notice one big difference: outstream video ads.
Such ads, which operate as self-contained units rather than as a prelude to another video, are everywhere these days. Publishers ranging from the Washington Post to Mashable to Rolling Stone all use outstream ads in “in-read” formats. That means if you’re reading an article on, say, Slate, you will see an auto-play video. If you scroll down, the video will stop and leave your field of vision. If you want to listen, there’s a prompt to unmute it.
This clever ad format — also found in other innovative places like skins outside of the page content itself — finds a middle ground between annoying readers and letting publishers monetize their sites, which is why it is likely to drive the trajectory of online video advertising for the next few years.
Addressing a market need
It’s no secret that right now there’s a huge demand for video advertising. Spending on U.S. online video advertising jumped 30.4% in 2015 to $7.77 billion and is expected to hit $12.82 billion by 2018, according to eMarketer. At the same time, publishers don’t have enough video ad space to sell.
Though stuffing web pages with video ads is nothing new, the twist is that outstream ads are front-and-center on a page. Readers can’t miss them and they then get to choose if they want to watch them.
As a result, advertisers can target a group of desirable users based on behavioral targeting data. While previously video inventory for such targeting might have been limited, sites that didn’t used to offer mid- and pre-roll inventory now can do so.
This presents a new opportunity to get in front of readers. In a 2013 survey of ad execs, 75% said online video ads were as effective or more effective than TV ads. On mobile, video ads are 5X as effective as banners, according to another study. Outstream ads in particular were found to prompt a 10% lift in brand awareness compared to prerolls.
For publishers struggling to eke out a living, the higher CPMs that outstream ads offer is a welcome boost to the bottom line.
Playing well on mobile
Outstream ads also play well on mobile, which is a big selling point since people spend more time, on average, watching video on their mobile devices than on desktop. On smartphones in particular, there’s no room on a 5-inch screen for video ads tucked away at the bottom or top of the page. Better to follow the template set by Facebook and include video within the main feed.
Kleiner Perkins Caufield & Byers partner Mary Meeker’s recent “Internet Trends Report” notes a huge gulf between where consumers spend their time and where advertisers spend their money. In short, advertisers are spending too much on TV and not nearly enough on mobile. In fact, Meeker dubs this deficit in mobile spending a $22 billion opportunity.
Video in this format allows marketers to take the best part of video advertising — its visceral emotional impact and primacy as a storytelling vehicle — and combine it with the targeted serendipity of banners. The primary difference is that no one pays attention to banners anymore. Video is much harder to ignore, which is why we’re all going to see a lot more of it.
Jerem Febvre is the co-founder, COO and managing director of Sublime Skinz Americas, a global provider of skin-based advertising working with advertisers and publishers. . In France, he created and managed several online projects and web companies, selling his first web browser game “Heroville” to Zynga in 2007.