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The rise of online video advertising

With companies constantly looking for fresh and innovative ways to tap into new revenue streams, it is of little surprise that online video advertising has seen rapid growth in the last year.  Analysts at Forrester Research are citing it as the fastest-growing digital advertising sector.

VW is one of the latest major car brands to follow users from television to internet, with its interactive film that asks viewers to predict what happens next.  Ultimately the video’s purpose is to promote VW’s Side Assist feature, which warns drivers about incoming traffic they might not have seen.  The presenter of the video asks the audience to hover over the time scale at a certain point in the video, activating the little preview box which depicts what happens next, thereby enabling them to ‘predict’ it.

Incorporating this interactive element differentiates the video from the traditional TV advertising that we are all so used to, heightening viewer engagement.  No doubt such videos will become a growing trend for automotive advertisers.

Earlier this month, social networking giant Facebook announced it will launch video advertising via its newsfeed from July, clearly recognising an opportunity to cash in on the significant budgets which are likely to be made available for marketing with a potentially vast reach.

According to the Financial Times, the video ads will appear in a user’s newsfeed, with the first video starting automatically, albeit without any sound.  Users will then have the option of activating audio at which point the video will restart from the beginning.  Several of the brands which sit on Facebook’s client council, such as Ford and Coca Cola, are expected to take part in initial trials of the new video advertising platforms.

The FT said that Facebook will be charging in the “low $20s” per thousand video views while users will initially only see video content from one brand per day, to maximise impact.  It has been estimated that Facebook could generate up to $1.5m of new revenues per day with the plans, a figure that could reach $4m by the end of the year.

There are concerns, however, that invading newsfeeds with further advertising will only frustrate users and jeopardise the Facebook experience, so advertisers – including carmakers – need to ensure that their videos don’t turn people off.  Using VW’s lead, keeping video fun and engaging, is certainly a good starting point.

One Comment to The rise of online video advertising

  1. avatar Adam says:

    To start off, I want to state that I am extremely excited about the opportunities available to brands as a result of the huge growth in online video advertising. eMarketer posted a fantastic article yesterday about the growth of digital ad spend among 6 major industry categories in the USA.

    Your article has spoken about the opportunities that will be made available to companies such as Coca Cola and Ford. However, what I am interested to know is this; will online video advertising become a medium that would also be effective for smaller companies such SMB’s? When researching this topic, I came across a startup company called Viddyad who are based in San Francisco, CA and Dublin, Ireland. Their service allows companies to create their own online video ads in minutes through the simple software which contains millions of readily available stock images and videos. I particularly enjoyed this website as I could test ideas and make as many videos as I wanted for FREE!

    This leads me to my next point; can more SMB’s avail of such services to create their own online video ads, thus promoting their business in the same way as huge multinationals have started doing. Is video advertising on Google and Facebook solely for the big boys, or is their room for the many more smaller, local business’ out there?


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