Video Advertising began somewhere in the early 2000’s, and gained popularity pretty much from the start. Around 2005, as YouTube established itself as the leading video-sharing website, the popularity of Video Advertising reached a new level. Since then, it grew even more rapidly, and in late 2006 it reached a certain milestone, when YouTube was purchased by Google. It has since grown to become one of the largest advertising mediums, and is regarded as a unique and independent advertising means. Marketers have since learned the significance of setting a designated budget for video advertising, as part of their online display campaign – contrary to the past, in which it was only considered a small sub-set of the TV advertising budget. Realizing the potential and wanting to remain ahead of the curve, advertisers choose to allocate more and more funds – even within the online advertising budget itself – from traditional banner ads and other display mediums, to proper video advertising.

Maximizing Your Online Video Ads: Exploring the Different Ad Formats Available

• Display ads (banners): These run across all areas of the site except the Homepage. Most commonly, they are available as a 300×250 ad that appears to the right of the feature video and above the video suggestions list.
• Overlay in-video ads: These are transparent overlay ads that appear on the lower portion of your video.
• TrueView ads, which mostly consist of three formats:
• In-Stream ads (Pre-Roll): These appear before the content a user wishes to view. They may be skipped after five seconds. You only pay for this ad format if a user watches the whole video, or 30 seconds of the ad, whichever comes first.
• In-Display ads: This offers your ad as an opt-in format, showing your ad thumbnail and some ad text either as an overlay on other videos, on the YouTube sidebar, or as an ad on Display Network partner sites other than YouTube. With this format you pay only if a user chooses to click your ad.
• In-Search ads: These appear as a result of a search performed on YouTube. The payment is only made if an ad is clicked by the user.
• Non-skippable in-stream ads (Pre-Roll): Video ads that can be inserted before or during the main video and must be watched before the viewer can continue watching the content selected. These ads can also be placed after the conclusion of a video, in the post-roll slot.

According to eMarketer

“Virtuous circle of content and technology adoption make video ads by far the fastest-rising category of online spending”.

The compound annual growth rate in the US market in the past five years is 38%, soaring from $2.16 billion in 2011 to $7.11 billion in 2015.

In a similar manner, video advertising in the UK is expected to be at the forefront, growing by a compound annual rate of 65% over five years. According to eMarketer’s predictions, by the year 2015, UK video online ad spending will reach $850 million, compared to $150 million in 2011. From a top-scale perspective of online advertising as a whole, video is expected to grow to 8.2% in 2015 from 2.1% in 2011. These figures aren’t very surprising, as more and more users spend lots of time online, both on mobile/tablet devices and on computers. Viewing video content, especially YouTube-based, is among the most popular online activities. The added value of the emotional draw users have to video content, similar to their draw to TV, makes video advertising even more efficient.

For example, video provider Eyeview and travel site KAYAK say that personalized video ads can have positive brand-boosting effects for advertisers.

In order to put this to the test, Eyeview split respondents into two groups. The first group was shown a generic KAYAK ad; the second a more personalized, localized ad featuring real-time flight deals for their local airport.

“The study found online video ad personalization and relevancy resulted in a 37% lift in reported purchase intent, a 100% lift in brand favorability and 73% lift in brand loyalty. Clearly, personalization can increase the ability to remember and relate to online video ads, ultimately creating a more powerful branding effect… Respondents were generally receptive to the personalized video ads. When asked to rate their perception of the personalized video ad on a Likert Scale, 66% felt positively about the ads while only 12% had negative sentiment about ad relevance. Twenty-two percent were neutral.”

In summary, it is therefore fair to establish that digital video advertising, if used right, can provide brands with a dynamic way to engage their online audience and establish a brand presence.