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December 1, 2019

New Research Suggests Using TV-Style Digital Video Ads Pays Off

Extreme Reach’s third quarter 2019 Video Benchmarks Report provides an interesting snapshot of the quickly changing landscape of digital video advertising. Granted, Extreme Reach offers a platform for video ad placement, so they have a vested interest in presenting digital advertising in the best light possible. However, their findings show the ways in which digital video advertising have become more like television advertising, and perhaps how this impacts ad effectiveness.

First, their report notes that there has been a shift in the past year towards the use of TV’s most popular ad length, the 30-second ad. As shown in Table I, the use of :30s is up 20% since last year; this has been primarily at the expense of 15-second ads, whose use decreased by the same proportion in the same time frame. This parallels our findings for linear TV advertising, where :30s hold a slight lead over :15s on the broadcast TV networks, and a strong lead when it comes to spot ads.


Another significant finding concerns the shift in ad placement. According to Extreme Reach, CTV ads (ads running in streamed content on smart TVs, mobile, or OTT) now represent 51% of ads served digitally, up 34% in just the past year. Meanwhile the proportion of ads served on all other platforms are down: desktop -29%; mobile -19%; tablets -44% (see Table II). So, in the past year, digital’s TV platform has become far and away the most popular for serving ads to consumers.

 



And what impact do these shifts have on ad effectiveness? Per the Video Benchmark Report, as shown in Table III, digital video :30s have an 89% completion rate, meaning that the ads played in their entirety. Shorter ads—particularly :15s—also performed well in this regard, however, when looking at completion rates by platform, CTV has far and away the best results, at 96%.



Of course, completion rates don’t tell us whether a viewer is actually watching the ad. As we’ve pointed out countless times, when it comes to TV research, Nielsen data only tells us that the commercial was tuned in and not skipped—not whether it was actually viewed. And as we’re well aware, the ability to skip or fast forward many CTV ads is disabled during program viewing. But perhaps this captive audience just might be watching when the ads air. We look forward to seeing research that shows whether CTV audiences are actually getting the message, but until then, it appears that the adoption of more TV-like lengths and platforms is a step in the right direction for digital video advertising.

Changing The Ratings Benefits The Networks, But What About Advertisers?

ABC recently made the news for announcing that Nielsen’s Live+Same Day ratings were being dropped in favor of Live+3, Live+7 and Multiplatform+35 ratings. According to a memo from ABC Entertainment President Karey Burke, factoring in MP35 triples almost all ABC show viewership over Live+Same Day viewing. And some shows performed even better.

This is all well and good for ABC, who can charge more for larger audiences, but does this benefit advertisers? The answer is…maybe. On the one hand, delayed viewer ratings may capture elusive younger, better educated and more affluent viewers. Potential exposure is a given since delayed ratings exclude people who skip the ads, and viewers who watch a network’s show on demand typically lack the ability to skip ads at all. On the other hand, are live viewers, viewers who watch a few hours later, a week later, or a month later all the same in terms of attentiveness, both to the program and its ads? We doubt it, if only from personal experience—half-heartedly working through a backlog of episodes of a once-favorite show before it’s purged to make space for something else.

There are decades of research on viewer attentiveness to linear TV programming and commercials, but much less is known about delayed and SVOD/OTT viewing. Right now, MP35 delivers a larger potential audience, but after that, who knows what advertisers are paying for?


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