While people are now conditioned to ignore traditional formats like banner ads, video has an undeniable ability to capture audience attention
Digital advertising has evolved dramatically since the internet’s early days. And while people are now conditioned to ignore traditional formats like banner ads, video has an undeniable ability to capture audience attention — and help you drive more ad revenue.
If you’re not yet capitalizing on the video advertising trend, you’re missing out on a tremendous opportunity to diversify your monetization strategy. Here are a few reasons why:
- People love video. Thanks in large part to social platforms like TikTok, the demand for content has shifted from text and images to video — and online video consumption is growing fast.
- Advertisers love video too! In May 2022, IAB predicted that spending on video ads would exceed $49 billion in 2022 — a year-over-year increase of 26%.
- Video ads offer higher CPMs. Brands are willing to pay a premium to reach an engaged audience, which is why video ads tend to command a higher rate than other ad types.
Understanding video ad formats
If you’re considering video advertising as a revenue stream, one of the first decisions you’ll have to make is the type of ad you want to use. In general, video ad units are divided into two categories:
1. Instream ads
Appear within existing video content. Instream ads typically run 10-60 seconds and may be placed at various points within the main video content:
- Pre-roll instream ads appear as soon as a video starts playing.
- Mid-roll instream ads appear at some point during the video, as determined by the publisher.
- Post-roll instream ads appear after the end of the video.
2. Outstream ads
Standalone videos that are embedded in non-video content, like a blog post or article. These ads appear on top of the content — in other words, “outside the stream” of content on the page. This is commonly seen as a sticky overlay in the footer. There are many different types of outstream ads. Some start playing automatically when the player comes into view and pause when the user scrolls away. Others follow the user as they scroll down the page, and then switch to a larger video player size.
Last fall, the IAB released new ad format guidelines for high-quality video needs for cross-screen video advertising in mobile, desktop, and connected TV. The guidelines can help publishers communicate requirements and specifications for their video ads.
Pros and cons of instream ads
Instream ads are an attractive choice for many reasons. One major advantage is that they offer higher CPMs than outstream ads. Advertisers know that instream ads will only appear within existing video content, where users expect to see ads — so they’re likely to stick around and watch the entire ad.
That said, instream ads also come with a few downsides. They can only be used with existing video content — and many publishers lack the resources to create a rich video library. You’ll also need to choose a video player to host on-page video content, which can be a daunting decision. (We’ll dig into options for video players in a future blog post.) Additionally, instream ads can be intrusive to the user experience — depending on how they’re used:
- Pre-roll ads have the greatest reach because they appear immediately when a user tries to watch a video. Because they appear right away, before the user is fully engaged with the video content, the user experience is relatively positive.
- Mid-roll ads tend to have a high completion rate because a user is unlikely to leave when they’re already engaged with a video. However, mid-roll ads are highly disruptive and may harm the user experience.
- Post-roll ads offer the best instream user experience because they don’t interrupt the video content. However, they’re also the least lucrative because few users will stick around to watch them.
Pros and cons of outstream ads
Outstream ads hold a few advantages over their instream counterparts. Most importantly, because they can run anywhere, any publisher can use outstream ads — even if they don’t have video content on their website. Outstream ads also tend to be more visible because they’re located directly on the page, rather than being embedded within another video.
However, outstream ads also have some flaws. They require large video files, which can slow down your site and increase load times. They can be less memorable than instream ads, because outstream ads are required to play with the sound muted by default. And as we already noted, advertisers tend to pay lower rates for outstream ads.
5 tips for effective video advertising
As a publisher, earning revenue is all about delivering a great user experience — and keeping your audience coming back for more. Video ads can enhance the on-site experience if they’re done properly, but it’s a delicate balance. Here are a few tips to help you get it right:
1. Keep it relevant.
Understand your audience and why they come to your site. Then use that knowledge to publish relevant content that keeps them engaged — and creates opportunities to serve up video ads.
2. Focus on attention.
Advertisers want their ads to be seen by their target audience — and not skipped. The viewability metrics that apply to display ads aren’t enough in the world of video completions, so focus on making sure it is placed within relevant content and offers a high content-to-ads ratio to drive engagement, rather than optimizing for simple viewability.
3. Consider size & placement.
A larger video player may help to increase attention, but ad placement is even more important. Pay attention to performance metrics to understand which pages get the most traffic and which ad units generate the most impressions.
4. Don’t overwhelm your audience.
When it comes to video ads, less is more. Limit the number of ads that are visible at any given time to reduce “ad clutter” — and follow our ad guidelines to optimize the on-page experience. Another way to improve the user experience is to include the “Skip Ad” button, which is a customization option in any video ad.
5. Mind your tech.
Video ads can eat up bandwidth and increase load time. Make sure your website, ad platform, and video player are optimized to load video files quickly, so users have a chance to see your ads.