Transcript of "Online Video vs. Television â Advertising in the Digital Age | By Frank Vertolli"
Online Video vs. Television Ã¢ÂÂ Advertising in the Digital
Age | By Frank Vertolli
Online Video vs. Television ÃÂ¢ÃÂÃÂ Advertising in the Digital Age | By Frank Vertolli
Online Video vs. Television " Advertising in the Digital Age
By Frank Vertolli
Global advertising spend in 2013 will see steady growth of 3.5 percent, reaching $503 billion by the
end of the year, with the largest share in television advertising, according to ZenithOptimedia. 1 The
travel and hospitality industries are in the top five markets advertising on this medium, spending
more than $152 million collectively. 2Although television still leads the way, consumer expectations
have shifted, and your marketing dollars should too.
The idea of primetime is somewhat dead. People are still consuming content, but the desire to
consume it and pay for it on their own terms based on individual wants and needs has caused a shift
in behavior. People have gone from actually sitting in front of a television to watch shows when they
air to making sure shows are recorded to watch at their convenience. Oh, and they also avoid
commercials whenever possible.
This has led to the growth of Internet streaming video services such as Netflix, Hulu, HBO Go,
Amazon, YouTube, all of which are easily accessible from a variety of devices, 24/7. According to
Sandvine, the future will see real-time entertainment applications dominate fixed access networks,
accounting for two-thirds of total data usage in 2018, driven largely by ubiquitous integration
between devices (e.g. smart TVs set-tops, game consoles) and streaming services.) 3 These
companies are already producing their own commercial-free content such as the critically acclaimed
House of Cards and Orange is the New Black on Netflix.
Nielsen reports there was a 22 percent increase in users watching video on the Internet in Q4 2012,
with an 80 percent increase in the time spent among users watching this medium. There was an
even larger spike in users watching mobile video (206 percent). 4
We're not saying television is dead " considering its reach and fact that everyone still uses it " it's
not going anywhere anytime soon. However, there is a shift in advertising that hoteliers should be
aware of when planning advertising budgets: moving some television advertising dollars into online
advertising, specifically digital video ads.
Television advertising is blasted broadcast content. The goal is always for viewers to watch the ad
and receive the message, but how do you know that you are reaching the right audience? There is
diversity amongst consumer groups that advertisers can pinpoint and target on computers, tablets
and mobile devices. Consumer groups, such as family travelers, fall under different behavioral
categories. Advertisers can track the behavior by device to determine if they are the proper
audience. Online video advertising can specifically target individual consumers' tastes with a much
lower price tag.
After polling 5,000 advertising executives this year, the Interactive Advertising Bureau found that 75
percent of U.S. senior executives plan to shift their budgeting from television to digital video
ads.5We believe this is the future of advertising.
How are you currently allocating your advertising dollars?
Considering Internet Video Ads
Recent research supports that online video advertising is more affordable and more effective than
television advertising. A study by the Internet Advertising Bureau (IAB) and Nielsen argues that
shifting ad budgets from television to online video can enhance campaign reach at lower cost. The
study examined 18 real television schedules across key advertiser verticals, finding that a 15 percent
reallocation of television-only budgets resulted in a 4.2 percent increase in reach at an 11 percent
lower CPM (cost per thousand). 6
The study also found that shifting TV ad budgets to online video made campaign reach more
effective, with by generating a lift in general recall (+15 percent), brand recall (+33 percent),
message recall (45 percent) and likability (40 percent). 6
Google also found similar results when they sent out a survey to consumers who watched our
TrueView ads on YouTube, one of the largest online video advertising platforms. Since they can
track who watched the ads, they have quantifiable data to reference. Advertisers have access to the
front end statistics of their video ads with the TrueView ad words interface to see cost per view,
percentage of people who completed the ad, impressions and more. They can also use Google
Analytics to gather additional data where it's all tied together with additional insight about website
traffic. There is no measurement for TV advertising at this granular level.
We implemented a three-week long TrueView campaign for one of our clients. Website visitation was
up 7 percent from the prior year during the first week. By the third week, it was up 62 percent.
During the three weeks, 52 percent of total website visitation was from the advertising campaign.
On the other hand, when we implemented a one week national DRTV (Direct Response Television)
campaign, website traffic only went up 12 percent. Did we mention the TrueView campaign was only
a fraction of the cost of the DRTV campaign?
Executing Online Video Ads
YouTube reaches more users every minute, every day than other network online. According to
Google, it will actually be the largest social network by 2017. 7
TrueView on YouTube is one of our favorite online video advertising platforms. Hoteliers can use
TrueView to bring awareness to their brand/property and drive traffic to their website. TrueView
allows viewers to skip ads after five seconds, also known as self-selective advertising. With this
model, you only pay for the ad if it is watched for at least 30 seconds.
In addition to YouTube's size and scale making TrueView appealing to advertisers, the platform also
gives you the ability to better target viewers compared to television.
Reaching Your Target Audience
TrueView allows you to reach people who are in your target audience with your message regardless
of what they're watching. The platform can tell what type of topics users are interested in from
cookie data on their computers (knows the device they're on, terms they search, websites they visit,
their location, times of day they search, etc.). It then categorizes users into markets with specific
interests and behaviors to figure out what video ads to put in front of them. The platform can also
make decisions based off the consumer's response to ads (if they watched the ad all the way through
and if they clicked through to your website).
For example, if a consumer watches an advertisement about Florida all the way through without
skipping, advertisers can see the type of channels this consumer watches on YouTube and can target
the consumer at a later date through a remarketing strategy, such as banner ads pertaining to
Other online models, such as Hulu, are similar to a traditional television model. You can target based
on demographics (age, location, etc.) and the type of shows consumers watch. Let's say you are
looking to target specific markets to travel to Florida through traditional TV advertising. You might
launch a commercial in New York on National Geographic targeting couples who are in their 40's
during a program such as Taboo. You have a rough idea of the age group tuning in, but it's a gamble
on reaching your target, and if they are actually tuning into the commercial or just fast forwarding
Cost per View?
With the cost vs. completed model TrueView follows you still get the scale and reach with the added
ability to measure engagement. Since people may or may not watch the online ad, it forces
advertisers to act smarter with online marketing while saving money since you only pay if the viewer
watches the ad for at least 30 seconds. Similar to other types of online advertising, TrueView's
payment system is a bidding format; optimizing the best price you should pay to get the 30 second
spot in front of a consumer (average cost per completed view is nickel to 15 cents). You're not
paying to show an ad for x amount of times, which is the standard television model. Instead, you're
paying to get in front of a targeted audience segment, maximizing your budget and value of the
Compared to online video advertising, the television advertising payment model is lagging. When
TrueView first launched their beta in 2011, they had a CPM (cost per thousand) payment system,
based off the traditional television model. This system failed because advertisers were buying an
audience with no guarantee that people were watching or cared about what they were saying. When
it comes to cost, advertisers only want to pay for engaged consumers.
The YouTube videos that play TrueView ads can be integrated into your website, on your YouTube
brand channel or even sent in an email. Currently, the platform's videos are the most shared content
on Facebook. 4 With the ability to easily share YouTube content, advertisers find this organic
exposure provides added value.
If you are interested in exploring online video advertising, start with the basics. You can repurpose
your television ads for online advertising (we find 30 second videos perform best). It's not necessary
to create new videos. As with any ad, it's important you have a clear call to action, such as a special
offer and encouraging viewers to visit your website.
Next, identify specific target markets " families, couples, adventures seekers, etc. Understand trends
with your advertising and website traffic before launching the campaign, because once you put
TrueView in the market your website traffic will increase. Once you have defined your audience, set
up an online video campaign and run it for three-four weeks to see how it performs. Explore how
many more consumers from your target market are visiting your website. For example, in the past
when we turned on TrueView in Boston for a client, visitation from the city outranked everywhere
else by 20 percent.
Consumers are changing their viewing behavior for video content, and you should take this into
consideration when planning your advertising. People are no longer watching their favorite shows
when they air, and we can assume they aren't always watching commercials. With the ability to
better target and track your ads at a lower price point with online video ads, it makes sense to
explore internet video ads.
Digital Ads Will Be 22% Of All U.S. Ad Spend In 2013, Mobile Ads 3.7%; Total Global Ad Spend In
2013 $503BAd SpendingVideo streaming is on the rise with Netflix dominatingGen V
ResearchThere's A Major Shift From TV To Digital Video Ad SpendingMoving 15% of TV Dollars to
Online Video Said Increasing Reach at Lower CostThe 2013 Traveler " thinktravel with Google