Click-through rate is the top method of measuring video ad success, cited by 39% of video advertisers in the US and Canada, ahead of actual product sales (38%) and visits to the brand website (35%), according to [pdf] a December 2011 study from Break Media. Data from “Digital Video Advertising Trends: 2012” indicates that other popular metrics include brand awareness or recall (30%) and video completion rate (29%).
Roughly 1 in 5 video advertisers use reached target audience (22%), social engagement (20%), time spent watching video (19%), number of times video was viewed (19%), and intent to purchase (19%) as methods of measuring the success of their video ads.
ROI Measurement Presents Problems
Advertisers appear to be frustrated by metrics, though: 42% say that difficulty measuring ROI is a hindrance to the use of video ads, ahead of other barriers to adoption including a lack of transparency on ad placement (40%), lack of standardized metrics (38%), and not enough ROI (35%).
Spend to Grow, Take from Traditional Media
29% of advertisers say they spent more on video ads than they planned to in the past year, more than double the proportion who spent less (14%). According to the report, in the coming year, two-thirds of advertisers will increase their share of online display advertising devoted to video ads, with the home furnishings, IT/B2B, alcohol, and women’s apparel sectors showing higher growth compared to other sectors. Advertisers may be paying attention to recent figures from FreeWheel, which indicate a growing consumer acceptance of video ads: according to FreeWheel, video ad views have grown at a faster rate than video views (128% vs. 97%) from Q3 2010 to Q3 2011. And even more encouragingly for video advertisers, although ad loads have increased, video ad completion rates have remained stable.
Meanwhile, according to Break Media, advertisers increasing their video ad spend in the next year say the dollars will come not just from non-video display budgets (45%) and overall advertising budget growth (38%), but also from TV (32%) and print/outdoor (25%) budgets.
Overall, video is forecast to account for 35% share of advertisers’ online display budgets in 2012, up from 27% this year.
VANs Gain in Popularity
73% of respondents indicate that they used video ad networks (VANs) in 2011, representing 12% growth from 65% in 2010. Additionally, in 2012, 92% of advertisers plan to use VANs and increase the share of spend placed with those entities from an average of 20% to 41% of total video dollars.
Actual Pricing Models Differ from Desired
Pricing models for video ads offered to advertisers appear to not match their preferences, though. A leading 69% of advertisers said they used cost per thousand views, although just 18% reported CPM to be their preferred pricing model. Similarly, 53% used cost per click, although it is the preferred model to only 16%. Other discrepancies between pricing used and preferred include cost per view (40% and 17%, respectively), cost per day/roadblock (37% and 8%, respectively), and cost per engagement (34% and 19%, respectively). The only pricing model to come close to parity between use and preference was cost per acquisition, with 25% reporting use and 21% citing it as their preferred pricing model.
The report notes that although use of cost per view (CPV) increased two-fold in the past year to 40%, many respondents said they did not use CPV because it was not offered by the publisher or VAN.
About the Data: Break Media’s study findings are derived from an online survey completed by 320 persons working for advertising agencies and the companies that hire them (i.e. marketers) in the United States and Canada. Respondents were solicited from the Advertiser Perceptions Inc. proprietary database of media decision makers and offered a cash incentive for survey completion.