With Online Video, Advertisers Don’t Always Get What They Pay For

By Jack Marshall
March 25, 2014

In the world of digital media, video is a hot commodity. But when it comes to purchasing online video ads, marketers may not always get what they pay for.

Marketers are typically prepared to pay a premium to reach Internet users with sound and motion, as opposed to banner ads which many feel are too easy for consumers to ignore.

As a result, the average prices for the most common kinds of video ads – the short branded “in-stream” messages that now feature before or within video content across many major sites — remain considerably higher than for other online ad formats. Just Monday, SQAD reported that in-stream video ads cost an average of $23.03 per thousand in 2013, 38 percent more expensive than regular commercial time on cable channels.

That means publishers and other ad vendors have an incentive to fill Web pages with as many video ads as possible, regardless of whether or not they’re actually being seen by consumers.

According to media buyers there are a number of techniques used by publishers and media companies to help boost the number of video ads they can sell. The simplest involves setting an ad to play automatically as people open a web page, regardless of whether they clicked to view a video. These ads often play muted and outside the visible portion of a users’ screen, meaning there’s a good chance they’re never actually seen. Marketers aren’t always made aware how these so-called “autoplay” ads work when they purchase the ad space.

“Publishers might not always be boldly explicit with acknowledgement of auto-play inventory, ” explained Scott Symonds, Managing Director of Media at digital agency AKQA.

Marketers say there’s nothing necessarily wrong with autoplay ads, but they should be priced less than video ads that require web surfers to consciously initiate. That isn’t always the case, they say.

“It’s a real concern with this medium, ” said Amy Peet, Senior Digital Marketing Manager at Chrysler. “We have to hold our partners accountable for what they’re selling us.”

Another tactic employed by video ad firms is a variation on the first: selling ads to marketers as “in-stream” spots within video content but actually playing them automatically inside a banner ad.

According to video ad measurement company BrandAds, around 24% of all the in-stream impressions its clients purchase are actually delivered as in-banner placements. In other words advertisers are paying for and expecting a premium, TV-like video advertising experience, but getting video ads stuffed in banners instead.

Agency media buyers say it’s a constant battle to stay on top of this type of behavior, and not just when it comes to buying video. They face similar challenges and pitfalls when buying banner advertising, too, especially with the rise of automated ad buying technologies.

The difference is there’s more at stake with video because ad prices are significantly higher, and investment in it is growing rapidly. Spending on digital video advertising in the U.S. is expected to grow 41% this year to reach $5.89 billion, according to research firm eMarketer.

“This happens in display, too, but video drives the budgets and it’s inherently more expensive, ”said one media buyer. “The portion of budget being wasted in video is a lot more than in display.”

Meanwhile the Interactive Advertising Bureau, a trade group for Web publishers, hopes its efforts to find a consistent way to measure only “viewable” ads will eventually help eradicate advertiser concern around these issues, by enabling them to purchase only video ads that users actually see.

But for the time being, marketers are forced to check campaigns after they’ve run in order to judge the quality of the advertising they purchased, and to ask for refunds if they’re unhappy with what they’ve been sold.

“When something doesn’t happen the way we expect, we have to negotiate makegoods, ”Ms. Peet concluded. “We’re always trying to make sure we’re getting what we paid for.”