February 09, 2017

Written by Tim Colucci

It’s Time to Adopt a Video Ad Strategy

Cable (read TV advertising) is growing old and becoming outdated. It’s time for businesses to seriously embrace YouTube advertising. Brands that invest in YouTube advertising can say goodbye to the days of wondering if their customer segment actually stays tuned in for their commercial or if they get up to get a snack. And gone are the overpriced commercials, the imprecise targeting, and the broad strokes of data that they receive.

To most CFOs, branding is an excuse to spend additional advertising dollars without a distinctive reward. One of the biggest and most expensive methods of branding is a traditional television advertisement; just take a look at the cost for a 30-second TV spot during the Super Bowl LI ($5 million or $166,666 per second). That commercial may be funny, distinctive, heart-warming, and informative, but what do you really get out of it? Other than getting Nielsen ratings for when the commercial ran, is there any way to measure the success? Did you hit your primary customer target? Were you speaking to a new segment of customer, and, if so, did the message resonate with them? Did your advertisement drive any direct sales? These are all good questions that any decent marketing strategist wants answered — and quickly. But with TV, those answers aren’t immediately available and can take months, if not years, to be fully fleshed out.

TV is a traditional outlet in a digital world, and according to Fortune.com, nearly one out of every five households “cut the cord” in 2016. Nearly 20 percent of U.S. households are no longer reachable via traditional TV advertising! This new gap, and a gap that is more than likely going to grow in the coming years, opens up a new medium for businesses of all sizes: YouTube In-Stream and YouTube 6-second bumpers.

According to Google, the average YouTube session is 40 minutes, and during that 40-minute session, there is ample opportunity for companies to show users a video ad at a fraction of the cost of a traditional TV advertisement. In many cases, video ads can be served to a viewer for anywhere between 5 cents and 25 cents. Yes, you read that right: a nickel and a quarter!

What are YouTube In-Stream ads? What are 6-second bumper ads? Well, everyone knows what they are; you just may not know them by name:

· An in-stream video ad is the sponsored video that plays before your video selection on YouTube (and across the entire Google Display Network) and gives you the option of skipping the full ad after 5 seconds.

· A 6-second bumper ad is the quick advertisement (6 seconds) that is shown before your selected video and are forced to watch before your video begins.

Both ad types are available to all advertisers but are typically pushed aside because many advertisers continue to look at them as a direct acquisition tactics, rather than for what they really are: TV commercial substitutes.

Since advertisers look at YouTube as a direct acquisition tactic, they expect to see a return on their investment. But, do advertisers expect to see a return on investment from TV? Of course not — because conversions can’t be directly attributed to TV advertising. The same strategic thinking should be applied to YouTube, and, once applied, you will see that the cost per view and the cost per conversion is much more cost effective. But, how is YouTube much more cost effective?

Any marketing strategist/manager thrives on data. Some like to slice it up into dozens of different views and others just want to see the overall worth of a tactic. But, with TV advertising, doing so is nearly impossible. YouTube and the Google Display Network, on the other hand, give you the opportunity to target even the smallest customer segments. Are you looking to reach females, age 25-34, who are political news junkies? Trying to target moms, 35-44, who are foodies, and have already visited your website? How about men, 18-24, interested in gaming? Men, 45-54, interested in cars? You can target all of them with YouTube!

Not only can you target customer segments, but you can see how many of them interacted with your site, subscribed to your YouTube channel, made a purchase, or watched another of your YouTube videos (other than the ad you just showed them). Not only can advertisers see the different interactions of an audience, but they can also see how much of the video ad that they watched. Doing so allows advertisers to determine if a video ad is too long, how much of the video a person watches before deciding to skip it, or see what percentage of viewers are tuned in for the entire video ad. All of these results can be determined the very next day.

Advertising pioneer John Wanamaker once famously said, “Half the money I spend on advertising is wasted; the trouble is, I don’t know which half.” Take advantage of the new, digital video ads, get ahead of your competition, and study the results so that you aren’t wasting this half.