It's been widely reported that digital video advertising budgets will continue to grow at a rapid pace. Forrester Research predicts that U.S. online video ad spend will reach $5.4 billion by 2016 (from $2 billion in 2011). While the number doesn't seem like a tremendous jump, research has found that online video advertising has something that not all media have: a stickiness factor. Nielsen recently found that half of U.S. consumers exposed to a TV ad featuring a sports sedan recalled viewing the advertisement. More importantly, when consumers were exposed to the ad across multiple screens (TV, computer, mobile phone, and tablet), that percentage jumped to 74 percent, a 48 percent increase in ad recall. For a brand or retailer looking to drive in-store traffic, these ads can have quite an effect on brand and product preferences.
This year is ripe with opportunity for brands and retailers (big and small) to take advantage of digital video advertising campaigns. With major broadcast events like political campaigns, the elections, and the 2012 Summer Olympic Games, traditional broadcast advertising spots will be priced at a premium. This leaves little opportunity for regional and local retailers and brands to get the air time they may be used to. However, millions of consumers will be tuned into online video channels for updates and coverage of these major events -- making digital video advertising an especially lucrative opportunity for retailers and brands of all sizes.
Whether it's a small retailer trying to gain visibility and drive in store traffic in a local market, or a large brand looking to complement a major national campaign with a digital video campaign that gives them additional reach, the medium provides a wealth of opportunities. In addition to brand or message "stickiness," video campaigns can be quite effective in helping these retailers drive in-store traffic.
The next phase in online video's expansion is in obtaining reach and relevance among the audiences that matter most. This is done by applying "big data" analysis or knowledge derived from large offline data sets pulled from point-of-sale information, social media, videos, music, local web pages, and online magazines. Brands and retailers armed with this information can more efficiently reach households by executing digital video campaigns, while complementing their traditional offline media plans. This approach makes it far more effective to reach the right consumer at the right time -- especially if you are looking to drive in-store traffic and sales.
Let us use the recent Super Bowl as an example. A major car manufacturer invested roughly $3.5 million to run a 30-second spot introducing a new vehicle to its fleet. The goal of the national campaign was to raise visibility and brand recognition. But now that the ad has run, what happens next? What can that manufacturer do to help drive sales? Should it continue to invest in national spots to continue to drive brand awareness, or would they be better served to complement that with a series of digital video campaigns focused at a key demographic within a certain mile radius of the manufacturer's dealerships? If they want the most promising path to driving traffic, then online video is the way to go.
Digital video advertising is a great way to reach a relevant audience, which can be identified by assessing billions of data points such as demographics, point-of-sale data, proximity to the car dealership, and annual household income. This is part of the "big data" I mentioned earlier. Advertisers now have a way to make this data actionable for the benefit of their campaigns. For instance, if the car manufacturer was looking to drive sales of a higher-end luxury car, it's unlikely that it would want to target areas that house a high population of college students. There is no need to re-invent creative either -- it can simply tailor the video used in the national spot, and have it display in targeted areas where the consumers are most likely to purchase the product live.
In the case of a smaller retailer or restaurant, digital video advertising campaigns not only make advertising more attainable, but they also help to eliminate wasteful advertising spending, which is often a large line item for a small business. Traditional print or broadcast advertising typically offers very little return for local businesses because it's not targeted and eats up a significant amount of budget. For instance, we've seen a small retailer cut nearly 90 percent of ad spending deemed wasteful by keeping its campaign targeted at only relevant audiences within an eight to 10 mile radius of its store.
If the exponential growth of online video advertising is telling us anything, it's that it's an ever-evolving and effective medium for retailers and brands of all sizes. Whether your goal is to complement traditional offline and broadcast campaigns or to dedicate the entire budget to online video, this growing medium is fast becoming one of the most cost-effective and influential ways to reach your relevant audience and drive in-store traffic.
On Twitter? Follow iMedia Connection at @iMediaTweet.
"Woman in kitchen using laptop" image via Shutterstock.