What Are Video Ads in Digital Marketing and How Do They Work?

The ad tech industry is constantly undergoing rapid changes. While digital video ads are old news, their significance has grown significantly over the last few years. This isn't surprising — desktop and mobile devices are becoming more accessible and sophisticated, and the internet connection is more powerful, so people spend more time consuming digital media.

Among these, video formats are currently unique, as they are highly immersive and accessible at the same time. With tons of video content and advanced technologies, digital video advertising is becoming one of the fastest-growing display advertising formats. In this article, we will make a profound overview of what video advertising in digital marketing is so you get the most out of it for your business growth. Let’s get started!  

What is video advertising? 

Digital video advertising is a part of digital advertising that displays video ads - either standalone or within online video content. This includes lots of formats designed for various environments, such as banner video, connected TV, or other OTT services. Digital video ads are usually traded via programmatic platforms; for this, advertisers utilize advanced targeting solutions.

One can choose among many display video ad formats such as linear or nonlinear, in-stream, or out-stream. Video marketing is useful for all sorts of business goals starting from building brand awareness to increasing sales and revenues.

Evolution of digital video advertising 

To understand the current state and potential of digital video advertising, one should first understand what the origins of this unique advertising format are.

The first video ad was displayed on a billboard in New York during a baseball match in 1941. Same year and place, the first television commercial was broadcast and seen by around 4000 people. With the introduction of TV, videos have quickly become the most effective advertising type for quite a long time. Right now, television is losing its popularity, and the internet gradually conquers the world.

While most of us are used to video advertising in the format of TV commercials, it wasn't so common for marketers to rely on video up until the mid-2000s. In the world of digital advertising, the video started to get more attention only in 2005 when YouTube popped into the scene. At the same time, technological advancements boosted video consumption. In 2006 Google acquired YouTube for $1.65 billion, which further increased the platform's popularity.

The current landscape includes tons of digital video advertising sites, social media, mobile app ads, games, and connected TV, - consumers embrace videos and high-quality content, so the list is only getting longer. Cisco predicts that by 2023 the proportion of related TV sets will reach 66% so we will see a massive increase in demand for quality video. Furthermore, 5G adoption is accelerating, and by 2023 11% of devices are expected to obtain 5G capability, which will advance digital video advertising even further. Let us now turn our attention to the potential benefits offered by such transformation.

Benefits of video advertising 

This type of advertising offers a wide range of advantages that can take your marketing strategy to a whole new level. Here are some of them:

High engagement

Video content is pretty engaging and it easily captures attention and spurs interaction as it combines visuals and sound. Compared to text or banner ads, they result in higher CTR and engagement. 

Increased conversion rates

Video ads are a powerful way to generate good conversion rates. For instance, showing products or services in action can create an emotional long-lasting impression. Including a compelling CTA can even motivate the audience to proceed with the next step, such as buying or signing up.

Raised brand awareness

If you aim at growing your brand awareness then video ads are a secure way to go. Visual storytelling can help your brand stand out and remain memorable to viewers.

Precise targeting

Demand-side platforms offer advanced targeting options to allow advertisers to reach the right audience based on their interests, demographics, and online behavior. This helps significantly optimize ad spend and improve KPIs.

Strong emotional connection

Better than any other ad type, videos can easily touch viewers' emotions, creating a stronger bond and connection with a company or a brand. In turn, it can nurture brand loyalty and encourage viewers to spread the word about you organically.

Versatility and flexibility

Video ads are highly adaptable and can be implemented across platforms and different devices. It’s a perfect choice for social media, websites, and streaming services. Their high flexibility can enable you to reach a broader audience and deliver content across various channels.

By introducing video advertising to your marketing strategy, you can certainly drive stronger marketing outcomes. Now, let’s move on!

Why digital video advertising is important

What are the benefits of ad videos, and why should marketers turn their attention to them?

A useful tool for building a connection

While display ads are doing an excellent job of informing users about a particular brand or product, they are not nearly as effective as videos in building relationships with users. 

he combination of visuals, sounds, and motion creates a unique opportunity to convey much deeper feelings and detailed descriptions, compared to other digital ad formats. This makes your message much more memorable and allows you to build an emotional connection between your brand and your customers.

An opportunity to get attention and engagement

With the growing amount of digital media and shrinking attention spans, getting user attention is not such an easy task as it was before. Luckily, high-quality video content is still doing a great job with this, mainly if it includes storytelling elements or a strong emotional message. 

Unique video content grabs user attention from the first seconds and allows brands to educate and entertain users while boosting their interest and engagement.

Universal solution for any business

Another unique feature of digital video ads is that they work equally well for most people regardless of age, gender, country of origin, or other factors. 

As a result, we can see that any brand from any industry can use videos for their marketing campaigns successfully. It doesn't matter whether the company is B2C or B2B, what are its business goals, and so on — good video content will do its job in any case.

One of the fastest-growing formats

According to Statista, ad spending in the TV & video advertising market worldwide is expected to reach $337.50 bn by the end of 2024. This is one of the most substantial results compared to other digital advertising formats. 

Taking into consideration technological breakthroughs and the further growth of video consumption, one can see that digital video advertising quickly becomes a must for every business.

How do video ads in digital marketing work?

Now it's time to take a look at how digital video advertising works powered by programmatic algorithms. There are some possible variations to the process, but the usual mechanism of displaying a promotional video ad looks like this:

Step 1. A user opens a website page. The ad tags within a video player send requests to an ad server to deliver the ad.

Step 2. Depending on the type of deal, an ad server either retrieves an ad directly (non-RTB) or waits for an RTB auction to run the sale and decides which targeted ad should be served to this user.

Step 3. An ad server counts an impression and sends the link to the video ad, which is usually hosted within a content delivery network.

Step 4. A video player gets the video file from the content delivery network and displays it to the user.

As we can see, the process is quite simple, and precisely the demand-side platform makes video ads serving a matter of milliseconds. The creation and calibration of digital ads are similar to other formats, so even a novice advertiser can easily handle it on programmatic platforms.

The digital video advertising landscape 

After exploring what digital video advertising is and how it works, we can move on to the types of video ads and their place within the programmatic ecosystem. The digital video ads landscape is broad and includes lots of different frameworks. To avoid confusion, let us turn to the well-structured classification suggested by the IAB:

• By content. Video ads can be short or long, which is defined by their duration - clips that last longer than 15 seconds are considered long. They can also be characterized by format (horizontal or vertical) and authors (professional or user-generated). Apart from this, video types can include the newest compositions, such as 360 videos, VR, and AR. 
• By distribution mechanism. As suggested by the name, this classification considers various distribution methods, such as broadcast, cable, satellite, IP-based, etc. 
• By platforms. Different platforms and devices require different specifications of content and format the video ads, so this categorization is especially essential when you create an omnichannel marketing strategy. These can be desktop or mobile devices, gaming consoles, social and messaging apps, OTT and connected TV, and digital OOH.

Types of video advertising

This one might seem tricky at first glance, but if one dives in a bit deeper, it becomes clear that such a structure is well-defined and easy to grasp.

Linear and nonlinear video ads

First of all, there are linear and nonlinear video ads. A linear advertising video is placed right between video content, just like it works on a TV. It can be a part of a pre-roll ad campaign, which means that an ad will be displayed before video content. There can also be a mid- or post-roll ad, which is placed during or after streaming the video content.

Nonlinear ads are served simultaneously with the video content - ideally, these shouldn't disrupt the user experience and might work more as an invitation for further engagement. Both types can be served with "companion ads" that are shown outside the video player.

In-stream and out-stream digital video ads

Next, there are in-stream and out-stream digital video ads. Much like linear ads, in-stream ads are displayed within, before, or after streaming the video. Out-stream ads usually take place within pages focused on other types of content, such as news, and blog posts.

Finally, out-stream ads are further broken down into subcategories and include the following formats:

• In-banner video. These are short clips displayed within a banner, as opposed to static creatives.
• In-article video. These ads are displayed within editorial content and are played between paragraphs while the user scrolls down the page.
• Native video. Depending on the context and environment, these videos can appear as recommendations, in-feed units, or promoted listings. Native ad formats mimic the environment and are usually more engaging.
• In-feed videos. They appear within the social, product, or content feeds and often include a headline and a description.
• Interstitial video. Covering 100% of the screen, these ads are hard to miss. They usually appear when the user is switching between content pages or while using a mobile app.
• Rewarded video. Similarly to interstitials, paid video ads take all the space on the screen. They are mostly displayed on mobile and are followed by a reward within a mobile app. This way, the user can get additional bonuses or services within an app in exchange for watching an ad.

Examples of video advertising

While getting started with video advertising might seem overwhelming at first, we know how to make it a bit easier. Here are some effective examples of video advertising by renowned international brands that will help you get inspired for your campaign. 

Coca-Cola 

This brand is famous for making stunning ads that take the breath away. Their “Masterpiece” campaign is absolutely spectacular so we encourage you to check it out. It was designed to connect their world-famous soft drink with the world of art. The campaign features the world of renowned artists such as Edvard Munch, Van Gogh, Vermeer, and others. These artworks come to life to bring Coca-Cola closer to people who really need it to wake up their creativity. 

AirPods Pro

Apple is also known for its immaculate and very captivating advertising campaigns and this one is no exception. It promotes its brand new noise-cancellation feature that makes listening to music a whole new experience that can disconnect you from the real world. In addition to the main feature, it also underscores a wide range of other features creating the irresistible temptation to go and purchase this product. 

Volvo 

This amazing and thought-provoking campaign shows how challenging and stressful parenting can be. It leaves you tired and sleepless which can be very dangerous or even lethal when you are driving from one place to another. Volvo is emphasizing its focus on the driver’s and passengers’ safety with its new ground-breaking safety feature. The brand highlights that their car takes care of you the same way you take care of others. 

Each of these examples highlights the power of compelling and emotional video advertising. Use them as an example and search for the approach that best fits your goals and target audience.

Best practices in video advertising

To ensure the maximum effectiveness of your video advertising campaigns, it's paramount to implement the best practices that can help you achieve tangible results in your future video advertising efforts:

Set clear objectives

Before launching any video advertising campaign, it's essential to clearly define your goals. Whether you're aiming to increase brand awareness, drive conversions, or boost engagement, having precisely determined objectives will help you make strategic and informed decisions as well as better measure and optimize the campaign’s performance.

Know well your audience

Understanding who your audience is can be fundamental to creating compelling video ads. To make it happen, we recommend you conduct thorough research to learn your audience's demographics, interests, and behavior. By adjusting your video content to these discoveries, you will be able to easily speak to their needs, and touch main pain points, and desires. Such a personalized approach that resonates with your audience is more likely to convert and drive great engagement rates.

Optimize for mobile 

Now, almost all video content is being consumed on mobile devices, which means it's essential to optimize your ad strategy for mobile. This implies adjusting video formats: vertical or square, large and readable text, concise and to the point. Mobile-friendly videos will create an impeccable viewing experience, resulting in higher conversion and engagement.

Keep it short and sweet

In the digital era, attention spans are getting shorter from year to year. To keep viewers engaged, go for short, impactful videos that convey your message quickly. Aim for a duration of 15 to 30 seconds. It’s sufficient to deliver a key message and such videos are more likely to be watched until the end, increasing the chances of your audience making the desired action.

Include a strong CTA

A strong call to action is fundamental for driving results. No matter what your end goal is — whether to make people go to your website, sign up for a newsletter, or finalize a purchase, a clear and compelling CTA is a must. Place the CTA within the video, preferably during a pivotal moment, to encourage viewers to take the next step.

Go for targeting and retargeting

Precise targeting is key to showing your video ad to the right audience at the right time. Gather and leverage data about your audience’s demographics, interests, and behavior to ensure your ads are shown to those most likely to be converted. Retargeting serves great to re-engage with users who have interacted with your brand before, increasing the likelihood of conversions.

Leverage SEO

SEO is a powerful instrument when it comes to video ads as it boosts the visibility of your campaign. Therefore, devote some time to optimizing it for search engines. Add relevant keywords in your video titles, descriptions, and tags. Also, we recommend including captions to improve accessibility and searchability. Optimized videos are more likely to appear in search results, bringing extra organic traffic to your content.

Continuously test and analyze 

Testing and deep analysis are the basis of optimizing your video campaigns. Based on the data you receive, you can refine your strategy, try out different video formats, and lengths, and play with CTAs to see what works best for the audience. Modern analytics tools enable us to precisely track key metrics such as views, CTR, and conversions. 

Choose the right platform

Selecting the right partner for your video ads is pivotal for making your video ad campaigns a success. Opt for the platform that aligns with your campaign goals and audience preferences to tailor your video content accordingly. At SmartyAds, we can guide you through this process and assist you in launching effective and compelling campaigns that create impact.  

These practices based on SmartyAds' extensive experience will certainly drive better results, and lead you to achieve your digital marketing objectives.

Final word

Advertising with video is a unique strategy that provides many promotion opportunities for all kinds of businesses. As they are at the peak of popularity, it is now the right time to jump in and experiment with digital video ads. The best way to do this is to embrace programmatic advertising and digital video ads. 

With the SmartyAds demand-side platform, you can make the whole process effortless and effective. The high level of automation minimizes the manual work and saves you lots of time. It is also cost-efficient, as you can set and optimize your ad budget in real time, depending on your campaigns' goals. Finally, advanced data-driven targeting solutions allow you to reach the right audience at the right time and place, making your strategy even more profitable.

Get started with SmartyAds DSP to launch your video campaigns and build a deep connection with your customers!