To most advertisers, the highest-value ad space is that which is most relevant to their products or services. For instance, a food brand would naturally gravitate to cooking sites.
This mindset is born of print, radio, and television advertising. In other words, it's display-based thinking. There's nothing wrong with it. In fact, it's been proven effective over many years.
There are, however, more effective and accountable ways of delivering video advertising. Let's stick with the food example. The advertiser is a national brand of olive oil that targets moms who like to cook. This brand costs more, it's organic, and it sells best in high-end stores like Whole Foods.
Would you rather place the video on a well-known site, such as Epicurious, or run it in a social game, such as "Mall World" or "It Girl?" Most planners would take Epicurious 10 times out of 10. The site indexes well against the target audience; the video will be placed in a cooking section on a great-looking page, and it will be surrounded by relevant content. On the other hand, the social games are not as prestigious. They have nothing to do with cooking, and, well, they don't look as good as Epicurious does.
On the surface, this is a no brainer. But let's look deeper. The data tells us that Epicurious indexes very well against the high-end moms the brand is looking for. So, the person who sees the olive oil video on that site is likely to be a mom, likely to be from a higher-income household, and likely, therefore, to live in an area that's close to a Whole Foods-type store.
Now, let's examine the same video on "It Girl." Being a social game, "It Girl" has a social profile for each of its users. So the audience here can be targeted by age, gender, and geography. In other words, the video will be viewed only by women ages 34-55, for instance, in specific geographic regions that are known to include the high-end grocery stores. Additionally, social game users opt-in to see their videos in exchange for virtual goods or currency. So before the video is served, the brand can ask a question: "Do you prefer to cook with organic ingredients?" If the answer is yes, they'll get the olive oil video. If it's no, they'll see another relevant video.
In the latter example, the brand is speaking directly to a highly refined audience, not betting on some sample poll. Plus, each view on "It Girl" is user-initiated, which has a dramatically positive effect on the results: 95 percent completion rates for 30-second videos, 3 to 5 percent of users taking an action after the view (i.e., downloading a coupon), and 36 percent increase in purchase intent.
On the "premium" site, standard click-to-play units come nowhere near those numbers -- 20 percent completion would be considered positive -- and there's virtually no action after the view.
There are other factors at play here as well. Well-known sites like Epicurious are in high demand, and, as such, they are expensive. Buying through an ad network or exchange means getting leftover inventory, probably below-the-fold, and you'll only run on Epicurious a small percentage of the time. (The bulk of such buys run on long-tail sites or worse.)
Careful examination of opt-in social video programs reveals dramatic, positive benefits that are not always visible upon first glance. As someone said at a recent PluggedIn roundtable event, "It's 'Moneyball' for online video."
As the online video industry continues to mature, advertisers will increasingly forgo the overhyped, overpriced free agents known as "premium" sites in favor of the less-celebrated but higher-producing players who stand at the plate time after time and deliver the goods.
Mitchell Reichgut is founder and CEO of Jun Group.
On Twitter? Follow Mitchell on Twitter @jungroup and iMedia Connection at @iMediaTweet.
"Movie background" image via Shutterstock.
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