A good 15 years ago, videos began appearing in the web browsers of the time—provided the necessary plug-ins (keyword: RealPlayer) were installed. About ten years later, the advertising industry began to take an interest in this, and the first advertising networks focused exclusively on video content emerged in the U.S. Today, video ads are the fastest-growing segment of the Swiss online advertising market. According to expert estimates from Media Focus’s advertising pressure statistics, video advertising is projected to grow by 30 percent this year. Industry professionals confirm this scale of growth: «The advertising budgets booked with us grew by about 30 percent per campaign last year,» says Jochen Witte, COO at Stailamedia and head of the Swiss Video Network, the first Swiss online video advertising network launched in 2009. The second such network in Switzerland, the Goldbach Video Network—which launched in February 2012—is growing at a similar pace. According to Alexander Horrolt, Managing Director at Goldbach Audience, growth is expected to be «well over twenty percent» this year and to remain «disproportionately in the double digits» next year as well.
Comparing such video networks is tricky, because not all of them are created equal. As is the case with the world of online video ads in general, the difference between in-page and in-stream video ads is important here. If videos on websites start automatically—in a typical ad banner format (such as a rectangle)—when the user loads the page, or upon user interaction (mouseover), these are considered in-page video ads. If the user specifically accesses video content, the embedded ad clips are in-stream video ads, whose typical formats are pre-rolls, mid-rolls, and post-rolls. In-stream ads are currently the favorite among online advertisers, as pre-rolls and mid-rolls have a greater advertising impact than in-page video ads. The latter are often perceived as disruptive—if they’re even heard at all: half of all internet users browse with the sound turned off. The situation is different with in-stream ads, where a video is specifically clicked on. In such cases, 70 percent of pre-roll spots are watched all the way through, and according to a German study, ad recall rates are four times higher than with in-page ads. Nevertheless, all marketers offer both ad formats, especially since in-page video ads can achieve a much wider reach than in-stream video ads.
Stailamedia and Goldbach Audience’s two video networks focus on in-stream video ads, with the Swiss Video Network generating approximately 30 million video ad impressions per month, while the Goldbach Video Network generates around 50 million. Most are played on desktops, and about a quarter on mobile devices. The strength of the Goldbach offering lies in the fact that it brings together all relevant Internet TV providers in Switzerland (Wilmaa, Zattoo, Teleboy, Blick TV, and Swisscom TV Online). Stailamedia emphasizes that the SVN functions as a closed network, allowing for cross-network capping (limiting the number of times a spot is played per user) and offering modern targeting technologies (sociodemographic, contextual). The direction in which video networks are heading is illustrated by the fact that both Goldbach and Adwebster have announced they will make their networks RTA-compatible next year, while S t a i l ame d i a already offers this feature today. With the introduction of automated trading processes, not only will bookings become more flexible and dynamic, but so will market conditions for all participants. Even today, international providers, video networks, and video RTA providers are entering the Swiss market. Of course, in addition to in-stream advertising on their own video networks, both companies also offer in-page ads on their display networks. However, they are not alone in this, as other network providers can do the same—those who have also incorporated video banners into their inventory and are bringing them to market through their own video network products. One example is Adwebster’s Video Network, launched a year ago. Adwebster CEO Michel Lazecki does not wish to disclose figures on current monthly video traffic. But even online advertising networks that do not operate an explicit video network are benefiting from the video boom on the web, as Leonardo Kopp of Admazing confirms: The Adfinity network records up to 10 million video views per month, exclusively in the in-page format.
YouTube: Competitor and Supporter
Since YouTube opened up to video advertising in Switzerland this past April, a major new player has emerged on the market. It took a few months to get off the ground, but according to this author’s observations, since the end of summer, only domestic commercials have been appearing before video clips on YouTube in Switzerland. It’s therefore no surprise that all the online advertising professionals interviewed for this article perceive the Google subsidiary as a strong competitor in the relatively small Swiss market. At the same time, the new offering in the video sector is seen as a valuable addition. This is reflected in the assessment of Leonardo Kopp from Admazing: «For us and our clients, the market entry has been positive. The targeting options, billing models, and performance are impressive. Plus, the impact of ads can be tested even on a small budget.» Jochen Witte of Stailamedia also sees a positive side to the new competitor: «Expanding reach can only be beneficial for the industry as a whole. The product innovations developed by YouTube internationally also enrich the further development of offerings from local service providers, leading to more attractive products and services for advertisers.» « According to Witte, the costs associated with branding-relevant metrics (such as cost per view) in YouTube’s products are »not necessarily cheaper than those of comparable offerings from Switzerland.”.
Reuse it or make a new one?
The question remains whether commercials originally produced for television should be repurposed for the web. This is the obvious approach if a TV commercial already exists. And if time and/or budget are limited, it’s also the only way to extend a campaign to the internet. But even if the goal is to increase the impact of the TV commercial, it makes sense to use the same commercial online. This is because the two channels are used by complementary target audiences. However, if a brand message is to be effectively disseminated online, separate online spots are essential—ones tailored to users« specific usage contexts and in which the campaign message is delivered early in the video spot. When spots are produced specifically for online advertising, special interactive features can be incorporated, such as social media links, accompanying banners, or links to online purchases. To support the practical implementation of these recommendations, the IAB published five standard format recommendations for online video ads (Ad Control Bar, Extender, Filmstrip, Full Screen, Time Sync) in September as part of the »Rising Stars” initiative.
According to Goldbach, several clients tried online video for the first time this year as an ideal extension of their TV campaigns and were «very satisfied» with the results. Some have already announced shifts in audience share in favor of online video ads for the coming year. And Stailamedia reports that bookings are increasingly being processed using Gross Rating Points (GRP) and Cost Per Point (CPP) rather than Cost Per Thousand (CPM). This trend toward online video aligning with traditional TV metrics demonstrates that the various video channels are moving toward standardization with a unified currency analogous to the GRP.
Christoph J. Walther