Why Pre-Roll Overlay Ads on Video are a Horrible Idea

I shared a link with my wife for a video on a major television network site last week. She clicked on the link and said “This isn’t very interesting. Why did you send this to me?” It was a pre-roll ad, before the video I had intended her to view. My wife’s response is fairly typical of how most Americans view pre-roll and overlay ads. It all gets lumped into the “This isn’t what I clicked on to see” category.

According to analysis from eMarketer provided by video ad network YuMe, between Q1 and Q4 of 2009, click-through rates dropped steadily from 1.88% to 0.74%. Completion rates dropped as well, from 77.4% to 66.3%  by the year end.

TubeMogul Research Reports recently completed a study where they looked at nearly 1.8 million videos varying in length from 3-10 minutes and distributed from top television broadcasters, magazines and newspapers. The results were shocking:

  • Overall, 15.89% of viewers click away from a video rather than sit through a pre-roll ad.
  • 24.85% of viewers click away on top magazine and newspaper sites.

So if I am a magazine or newspaper publisher I’m looking at these numbers and thinking “So pre-roll ads are a revenue stream but I am losing nearly 25% of the audience who was coming to my site to view OUR content because of them.” It’s sort of a Catch 22…but is it really?

I wrote about this in an blog post titled Stop Trying to Force Monetization of Online Video over a year ago when the statistics were already starting to plummet for pre-roll and especially post-roll overlay video ads. I still believe the only occasion where pre-roll ads or post-roll ads could be seamlessly built in around the content is with long-form (online television shows or movies) not every 90 second news story on their sites.

I believe we are in a scenario not that different from when television was in it’s infancy and they tried to apply “what worked” for radio broadcasting to television advertising. It failed. The same way pre-roll and post-roll ads applied to online video content are trying to mimic television commercials and are having predictably abysmal returns.

People have a shorter attention span online than they do anywhere else. You’ve got less than 5 seconds. If the content they clicked to see wasn’t there, they are long gone.

In today’s online world if you really want to get people to view your video content – don’t slap it over another publishers video content…create your own story with a call-to-action built in. Besides if you create content geared and tagged to get found by your demographic, it’s that much more targeted to reach your audience when and where they are searching. Couple that with the fact that audiences are not loyal to any specific publishers online where you would typically pay to run overlay ads…is running pre-roll really worth it?
 

Eric Guerin Eric Guerin (117 Posts)

Eric Guerin is the founder of Adelie Studios. He chooses to use his creative powers for good and not evil by helping businesses to better market themselves using animated marketing videos. He can easily be bribed with coffee.



 
 

11 Comments

  1. Eric Guerin

    Hi Corey,

    Appreciate your feedback and contribution to the discussion! The example of Hulu is exactly the point I made in this post of where targeted pre-roll CAN be effective. To your point about value exchange – If I’m going to a site like Hulu to watch an episode of Lost I’ve made a time commitment and would be more than willing to sit through a pre-roll ad but the little 60-90 second news story with a 15 second pre-roll ad on the beginning is the problem. My point is pre-roll being applied to short form video is completely ineffective with how people consume short form video content. Particularly when it’s just recycled television fodder. We live in the age of video snacking particularly for clips shorter than 3 minutes and unless it’s something a viewer really wants to see…they’re gone.

    I agree with your sentiment toward click through rate, but pre-roll video ads are running online where analysis is done by measuring viewer actions. Just running pre-roll ads without any sort of measurement of it’s effectiveness is the equivalent of…well…running TV ads, a static banner ad or a billboard on the side of the road. You’re paying for eyeballs. While click through rate will always be notoriously low for pre-roll ads…isn’t that level of viewer engagement IDEALLY what the company running the pre-roll ad is hoping for?

    Now about creating your own content – it’s not an infomercial either, you’re talking in TV terms. Why not think on a higher level and target those creative shops you were calling out to create video for online consumption? I’ll take your “local restaurant” reference as an example. Imagine someone is searching on Google for a restaurant in (name your town) and among the text links there is a landing page in those Google rankings on the first page with a video. They click and watch a video podcast of the restaurant, dinner review or a creative tour of the facilities, etc. Forrester Research indicated that videos, properly submitted, are 53 times more likely to generate a first page Google ranking than traditional SEO techniques. So I ask you what provides more value to the company thinking of creating online video content; people searching specifically for the services you provide and engaging with your video on your website or running pre-roll ads on a pay per impression basis to an undefined demographic?

    Unless pre-roll ads start thinking creatively by targeting demographic and providing interactivity to the viewer they are doomed because sooner or later companies are going to stop paying on a pay per impression basis because they will realize they aren’t getting much return on that investment.

    Reply
  2. Eric,

    Great post. You’re on the same wave length as Wade Roush from Xconomy who published an article with similar sentiments this morning (http://www.xconomy.com/boston/2010/02/19/online-video-advertisers-enough-double-stuf-time-to-get-targeted/?single_page=true).

    It is such a shame online video ads are reliant on a a model established when there were only a handful of TV outlets nearly 50 years ago – the broadcast television commercial. I guess advertisers continue to purchase pre-roll ad units to get that “mass” reach, but really, web video marketing is a lot more effective. For less budget than a typical online media buy, marketers could be creating engaging content that lets them “own their audience” and will enable them to generate a lot more engagement than just a re-purposed TV ad. Plus, the creative options are endless. Sure, you could film a “commercial,” but there are so many more options for web video marketing content: testimonials, webisodes, tutorials, etc.

    Thanks!

    Jenn

    Reply
    • Eric Guerin

      Thanks Jenn! I find it fascinating that with these recent numbers released mainstream media is still pushing pre-roll. There’s a lot of smart people involved in these organizations and you’d think they’d learn to adapt instead of clutching for dear life to a dying model.

      I think more and more companies will start realizing that they can get more bang for their buck by targeting their audience with laser like precision using their own video on search engine optimized web pages than the current shotgun technique they are applying with pre and post-roll ads.

      Reply
  3. Oh, Eric. I couldn’t disagree with you more. Sorry, my friend. We don’t need to quit. We can do better.

    http://www.onlinevideowatch.com/video-advertising-glass-half-full-damnit/

    Also, Jenn & Eric, I’m unclear why you are confusing the ad format with the buying and delivery technology. Pre-roll doesn’t equal “mass reach.” Especially not on niche content. And pre-roll doesn’t mean “Only a linear, non engaging TV commercial.” There’s so much more creativity to be unleashed. Why treat this like a matured market?

    We can serve highly targeted pre-roll. We can use that “laser” Eric mentions to deliver highly targeted, optimized pre-roll. We can use powerful audience buying platforms, like Quantcast, to buy those niche audiences, and serve them whatever ad format is appropriate for the content they are watching.

    Creating more crappy content isn’t the answer to monetizing other content. This isn’t an either/or proposition. How are you going to drive people to your infomercials anyway?

    Where’s the data that shows that your “engaging content” can be created for less than the cost of a typical media buy and be more effective? How much is “typical” anyway? Typical for Coke isn’t typical for your local restaurant, yet both should be leveraging video.

    Reply
  4. Corey – great contributions to this discussion. You raised some great points. I do believe in the right context, a targeted pre-roll ad can work. Most viewers accept pre-rolls as their payment for watching long-form content.

    One of the points Eric raised really does hit at the heart of the argument – if pre-rolls are being run ahead of user generated or short form content, it just irritates the heck out of the viewer and it doesn’t end up working for the advertiser. Organizations are investing a great deal in purchasing the media space. They are hoping to reach an audience with their message. My point – in some cases, the organization could be better off taking the budget for paid advertising and using it to create “own the audience” campaigns. Daisy Whitney wrote about this earlier this year and I think it really does get to the core of web video marketing – buying media space on a publisher’s site may not be the best tactic for all marketers (http://daisywhitney.com/newmediaminute/why-rent-when-you-can-own-an-audience/).

    As a fan of online video, I would love to see this tactic work in every capacity. I’m only concerned that organizations may walk away from the power of video if they don’t see pre-rolls working. I would also like to see the industry evolve to a web-specific format that isn’t just a “redo” of broadcast TV ads. It hasn’t happened yet, but I think it will. Ultimately, the way we view online is going to be different than the way we watch TV.

    Reply
    • Eric Guerin

      Nice input Jenn! I agree with you and with Corey’s larger point that I wish pre-roll on long form content would just get “smart” because watching video online is SO much different from how we watch video on TV. With all the targeting you can do with Google AdWords and Facebook Advertising you’d think video advertisers doing pre-roll would get more inventive. You’d also think with the technology that they’d incorporate more opportunities for viewer engagement with polls or other interactive activities.

      Reply
  5. On the short form front, I think we agree, and are coming at it from different sides. Pre-roll doesn’t have much of a place in front of short form content, other than a quick bumper. Ok, so lets try not to blame “the format” because “the publisher” chooses to do something stupid. Fair?

    I also agree with you on the effectiveness point, but again would push for a more thorough conversation. I’m not suggesting that advertisers don’t measure. I’m suggesting that they measure smarter.

    Dynamic Logic, Insight Express and other companies do brand measurement surveys. They take a sample of the audience and do a control/exposed comparison survey. Did the ad make people feel more positively about the brand? Are they more likely to make a purchase from that brand the next time they are shopping? Nothing to do with CTR.

    I’ve told other marketers very simply, “I can’t define engagement for the entire industry. But I can look at your creative and define an engagement metric for this campaign.” And thats what needs to happen. Never mind how it benchmarks against other campaigns. Did it work for you? Great! Do it more. No? Try something else.

    Its nice to have an intelligent discussion on a Friday, isn’t it?

    Overall, I just want the industry as a whole to start talking about video advertising like the complicated science that it is, and stop looking for a universal metric that tells us everything we think we need to know.

    Reply
    • Eric Guerin

      Hey Corey – great points and agree with you on all fronts here.

      I can only hope online marketers start to recognize the fragmented niche areas of online video marketing and that they can’t apply a blanket approach to everything.

      Thanks for bringing it on a Friday and making the blog post conversation far more interesting.

      Reply
  6. Online video marketing can be very touchy. Just as you said Eric, hopefully online marketers recognize this and make adjustments. Thanks for the great information and comments.

    Reply
  7. Great work on the stats. I totally agree though, those overlay ads are really killing the video viewership.

    Reply
  8. When all the Print and TV ad execs are long dead and buried – maybe then, someone will do it right.

    Reply

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