Video Ads Get Props in Study

May 29, 2006  •  Post A Comment

Broadband video gets validation as an advertising medium in a new study by CNN showing that video ads boost the effectiveness of online advertising in traditional measures, including awareness.

One huge advantage broadband video commercials have over other forms of advertising is that they are almost certain to be watched-CNN’s study found that 99 percent of viewers watch all or nearly all of the video ads shown before a requested news clip.

With advertisers concerned that consumers are using digital video recorders to fast-forward through their commercials, “That’s a valuable place to be right now,” said Greg D’Alba, executive VP and chief operating officer for CNN Advertising Sales and Marketing. “They’re going to watch that video because the content behind that commercial is very valuable to them.”

Advertisers are chasing after broadband video, paying prices that are comparable to broadcast television on a cost-per-thousand-viewers basis. And while online advertising is thought to be more accountable than that on television, it is still new and ad buyers are seeking more data about how it works.

The CNN study, conducted by the in-house CNN Digital Research group, looked at products in the luxury auto, financial services and telco categories. It found that when video ads were coupled with regular Internet billboards, ad awareness for brands increased by 1%BD; to three times and that brand perception scores increased by two to 2%BD; times.

The video ads contributed to big increases in believability and effective communications of the marketing message, the study found. Online video ads also generate word of mouth, because people who saw videos and banners together were 18 percent to 71 percent more likely to recommend the product than were people who simply saw banner ads.

“The study is very positive,” said Ed Montes, managing director of Media Contacts, the digital division of ad buyer MPG. “It helps me build a case that all my clients should be really looking at what opportunities there are and what the right fits are. It sheds more credibility that broadband video is a more than viable part of the channel and that it can affect things like awareness and consideration, which are more of the traditional television metrics.”

CNN has been selling digital advertising along with cable ads for a couple of years. And in just the past few months, its broadband video business has spiked, jumping from 28 million streams in February to 41 million streams in April. With that, revenue has been growing at a double-digit-percentage pace, Mr. D’Alba said.

“The more we add, the more demand there is. The demand-supply equation is still very strong in our favor,” he said. “It’s kind of like the tail wagging the dog,” with digital attracting both new viewers and advertisers to the CNN brand, he added.

While some advertisers buy only online advertising from CNN, in last year’s upfront about 80 percent of CNN’s deals involved multiple platforms, Mr. D’Alba said. And while more money is being spent on digital, it’s not decreasing cable revenue.

“We’re seeing more advertisers that are dedicating money to digital media that are spending more money in television for us,” he said. “It seems like there are pools of dollars at some of these agencies that are marked for integration.”

Different clients find money for broadband video in different places, Mr. Montes said. “It’s a combination of network and interactive budgets,” he said. “Some things are being purely funded from the digital budgets and some is shifted from network budgets.”

While this study is geared to CNN, Mr. Montes thinks broadband video from other networks would show a similar if not quite as strong pattern. “It’s clear CNN is a trusted brand. I don’t know if you’d have quite the same performance if you took it to other places,” he said.

Mr. D’Alba also said CNN has unique strengths in a digital world. “I certainly can’t speak for any competitor or for anybody else out there, but there aren’t many other organizations out there that own their own content, that have the brand recognition of the content and seamlessly integrates it to reach these very valuable consumers,” he said.