Break Media Survey: Rise of the Video Ad Networks


I’ve heard from numerous publishers that they are regularly overbooked when it comes to video ads; some ad ops teams are actually seeking out ways to drive more video traffic on their sites. Overbooking has become an unwanted trend as video exploded this year ($2 billion in spend!), but the space is still a rapidly growing boy.
According to a new survey by Break Media, parent company of video sites like and a video ad network, and Advertising Perceptions, 68% of advertisers will increase their video budgets next year, with 38% attributing the increased spend to overall advertising budget growth. Fourty-four percent suggested the bump would be cut out of non-video display budgets and 38% said from television budgets (25% suggested a shift from print) While 57% of advertisers spent what the planned to on video in 2011, 29% spent more (only 14% spent less)
But the most interesting development last year and going into next is the rise of the video ad networks. Considering that publishers are overbooked and advertisers are demanding greater reach, it seems a logical step for the development of the video space, but how quickly spend is flowing into networks is impressive. According to Break, 159.1 million U.S. Internet users watched 7.5 billion video ads in a single month, which divides down to about 50 ads per user – 80% of these ran through video ad networks.

In the previous year’s survey, Break noted that video ad networks were not getting much love as direct buys were to be the method of choice. One-third of advertisers only planned to buy directly (and didn’t use any networks the year before while about three-quarters of those using networks dedicated less than 25% of their video budgets to the channel. This year’s survey of 320 agency personnel and marketers whose clients spend a minimum of $1 million on online video advertising found that 73% are now using networks and 92% plan on using the channel in 2012; the percentage of video advertising budget dedicated to networks will increase from 20% in 2011 to 41% in 2012.
Video ad networks feature better capabilities for dealing with advertisers’ loudest complaints regarding online video advertising: campaign performance, targeting, ROI metrics – and definitely reach. Interestingly enough, last year Break cited an early Collective Media report on display advertisers’ adoption of ad networks and targeted approaches – advertisers decided to buy their own audience instead of a publisher’s. Break commented that we might see something similar happen in video, and this report is good evidence to support that.
Video ad networks also have the advantage of a wider variety of units available, which it seems advertisers are definitely interested in. While pre-roll still proves to be old faithful with 31% of advertisers citing it as their favorite unit and 63% planning to use it in 2012, mobile video is a rising star. Thirty-nine percent of respondents used mobile video in 2011 but 55% are planning to in 2012. The ramping up of mobile video ads seems more out of necessity, as only 8% cited mobile as their preferred format; 7% cited the rich media overlay, 8% the ad selector unit and 9% the expandable banner.

While 10% gave a thumbs up to in-banner video, those planning to use the unit sank to 53% compared to 59% last year. Forty-five percent are planning to use rich media overlays in 2012 versus 38% last year, while 43% want to use full-screen expandables (37% in 2011), 33% ad selector units (18%) and 33% videostitials (28%). Also garnering interest is connected TV units, jumping from 12% usage in 2011 to 24% planned use in 2012.

While advertisers’ chief concerns with video advertising – difficulty measuring ROI (42%), lack of standardized metrics (38%), lackluster ROI (35%) – are similar to last year, the lack of transparency (i.e., where and when a video ad played, as well as who to) was on the minds of 40% of those surveyed. Arguably, this is a major weak point for video ad networks, alongside inventory quality – it’s a space where publishers will likely keep the upper hand, even as networks add video verification tools.

It’s still hazy when it comes to what constitutes success for a video campaign and how that’s measured. Many of the rules of display and search would seem not to apply considering that video is a better branding tool than a direct response engine. Still, 39% of advertisers are measuring video success by campaign click-through rate. More suitable (and varied) metrics being used include brand awareness/recall (30%), video completion rate (29%), social engagement such as shares (20%), time spent watching video (19%) and number of video views (19%).

Cost per click is used as a pricing structure by 53% of video advertisers, but the most widely used is cost per mille at 69%. A quarter use cost per acquisition, which is the preferred pricing method for 21% of advertisers. Other commonly used pricing methods include cost per engagement (34%), cost per day/roadblock (37%) and cost per view (40%), which Break notes doubled in the last year. I wonder if that last one will increase with more formats like YouTube’s TrueView ads, which allow users to skip after five seconds, and an increased use of videostitials and expandables.