In the 1990s, to advertise digitally meant to slap a banner ad on a website and hope for the best. Today, marketers use advanced targeting technology to find specific users across devices and platforms, including social media channels. They employ complex and interactive video advertising experiences, and they personalize that creative based on the end user’s demographics, preferences and behaviors.
In this age of digital transformation, marketers leverage artificial intelligence to process more data and make better decisions than a mere mortal ever could. By 2020, 86.2% of digital display ads and nearly 80% of digital video ads will be bought via programmatic channels, according to eMarketer. While it is all very 21st century, I’d argue there is one area in which innovation has not kept pace with the rest of the industry: measurement, particularly in video advertising.
Many brands still use metrics like impressions, click-through rates and completion rates to evaluate their video campaigns. And some still use cost per mille (CPM) pricing models. Measuring impressions literally goes back to the 1950s, when Nielsen first started using the metric to gauge audience exposure to radio and TV. Digital media borrowed from broadcasting best practices to develop its emerging measurement strategies. But unlike radio and TV, nearly everything in digital is measurable. Why measure exposure when you can measure user interactions like engagement, conversions and shares?
Some advertisers report they are having so much trouble measuring the effectiveness of their video advertising that they are slowing their rate of investment in the tactic. It’s about time for innovation in how buyers are assessing their digital campaign return on investment.
Video Measurement Challenges And Opportunities
As digital has evolved, marketers have placed increased responsibility on engagement, rather than focusing solely or primarily on exposure (i.e., impressions). Repeated studies have shown a positive correlation between a user’s time spent with an ad and brand recall. As such, engagement was found to be one of the most powerful benchmarks for measuring the effectiveness of your advertising.
So, what does that mean for video advertisers? Many video advertisers use completion rate to gauge engagement. This is a telling stat when someone chooses to watch a video. In these cases, the completion rate is a powerful indicator of intent. For example, research from Google found that people who completed skippable YouTube ads had a 19% higher purchase rate than the campaign average.
But completion rate is misleading if you are running non-skippable ads, as a growing number of marketers are probably going to do thanks to YouTube’s recent announcement that any channel monetizing its videos from ads can now use non-skippable ones (previously, only a select number of YouTube channels could use this format on YouTube).
Obviously, your completion rate is going to look impressive if you are forcing people to watch it. And who is to say whether they are actually paying attention or doing something else, like using a second screen or zoning out? According to a recent survey, TV advertisers cite consumers being distracted by second screens as one of the top factors limiting the success of their TV campaigns. This just goes to show that you can never take an audience’s attention for granted.
How To Better Quantify Engagement
The industry knows engagement matters, but we need better metrics for quantifying it — something beyond completion rates. A simple way to make video ads more engaging is to give people a choice in whether or not they view them. Don’t just give them the option to skip it, but actually invite them to press play, expand a video player or turn up the volume. All these actions are valuable signals to marketers that someone is truly interested in the content.
Marketers should also be able to measure engagement generated by their campaign based on the outcome. Not all video ad viewers will click through to the brand’s site. Yet, some of these “passive” viewers might visit the brand’s site based on brand recall and make a purchase. The ability to attribute new customers to a video campaign offers priceless insights and data for future campaigns. These are just a few methods that can improve engagement metrics. However, considering the 21st century-type innovation we have seen in other spaces, there is much more we can do.
The importance of engagement should also be reflected in video pricing models. As an industry, we have implemented viewability standards to make sure brands don’t waste spend on impressions that aren’t seen. Let’s take it further and allow brands to only pay for metrics of true engagement rather than completed views and impressions.
It is almost 2019. Video advertising is no longer in its early stages, and advertisers are right to expect more. It is time for meaningful innovation on the buying side of the video advertising equation to enable a more transparent and meaningful measurement of success for advertisers. This will increase the confidence of buyers in digital advertising and encourage its continued growth over time.