Originally published on VideoNuze on June 22, 2015
Controversy and confusion — two words that describe native video advertising. It may be one of the industry’s latest emerging ad formats, but brands, advertisers, media executives and even the Federal Trade Commission have been in advertising purgatory over it — questioning whether native video is a real form of advertising or a publisher trick to make consumers believe an ad is actually editorial content. Couple this with the debate over the high price tag, and the looming question remains: “Is native video advertising worth investing in?”
The answer is yes, and this article will explore why.
The Controversy
The first point of controversy around native ads is the price. Display ads are sold directly for $10 CPM, while video ads generally sell for $20–30. Publishers have been accused of driving higher video ad prices through native video. In reality, it’s the scarcity of inventory coupled with a higher quality ad experience that drives the higher price.
Some have accused native video as being fake — I’ve even heard executives say it’s a form of fraud. This baffles me, but it clearly stems from people’s misunderstanding because it’s a new format. Most executives don’t see how native video is, in fact, a transparent and valuable form of advertising that helps brands reach consumers in a more organic way. It’s an extension of the ad user experience optimization practice that many publishers have been engaged in for some time. Since publishers have to invest to support native video, they select more high quality content to pair with an ad. This means consumers are actually receiving better content and the ad unit itself is optimized, not just the content that surrounds it.
Native ads have even been called invasive. Let’s be honest — all ads are semi-invasive, but native video ads are designed to be less intrusive, as they appear within content a user is already engaged in. Think about this: if a reader gets through 75 percent of an article, serving them a video ad at this point won’t hinder whether they finish the article or not — they’re too invested.
The Confusion
How do we label native video ads? Some executives refuse to label them as an advertisement, claiming it’s inaccurate. Descriptors that are currently being used by large publishers are “sponsored by,” “presented by,” “promoted by,” etc. But when all is said and done, a native video ad is just that — an advertisement. In fact, native video can even be sold by a technology vendor and delivered programmatically, so labeling it something other than an ad causes unnecessary confusion in the market and for consumers.
Additionally, the idea that native video lacks the ability to generate engagement is a huge misconception. The industry assumption is that video should be maximized to full screen in order to grab users’ attention; however, consumers don’t always go that route for specific reasons. The trends and measurements around viewability have shown that ad size and ad performance are not necessarily directly correlated because of all of the variation in user experiences on the Internet. For example, on Facebook, many consumers prefer to view video in a smaller format because it’s the most convenient way to watch the ad without losing their place in the feed. Since they have the option to view videos in-feed, the likelihood of engagement is actually higher.
The Real Deal
Despite some controversy and confusion in the market today, native video advertising will continue to grow. An eMarketer study from the ANA reported 66 percent of U.S. client-side marketers plan to increase their native advertising budgets this year, and an April 2015 report from the IAB found 68 percent of marketers expect their video ad spend to increase, so native video advertising’s future is looking bright.
Here’s the bottom line: a video ad — full of sight and animation — presents a more pleasant, entertaining story and is easier to engage with than many other formats. As a result, video ads typically see a higher click-through-rate (CTR). A recent study from Business Insider found that, on average, video ads have a CTR of 1.84 percent, the highest CTR of all digital ad formats. Native ads, too, see great conversion with a 53 percent higher purchase intent. Combined, the two formats are a powerful form of advertising worth the cost to drive both brand lift and sales.
Continuing to understand this format, its challenges and progression is important, but so is focusing on the big picture. The idea behind native video is that advertising becomes content and content becomes advertising. When the two components act as one, advertisers are doing their job correctly — creating a seamless ad experience for consumers.
The conversion numbers for video and native speak for themselves. The two formats combined generate consumer value and one to one marketing effectiveness, thus creating a powerful medium that any smart marketer should seriously consider.
