Why is Video More Expensive Than Display?



If you’ve considered running online video advertising, and have looked into what it costs, you’ve probably discovered that video can run three to four times more than regular display advertising. Here’s why.

First, there’s the obvious – it’s video and not a static ad. I’m sure I don’t have to tell you why a television commercial is more powerful than a billboard, right? Video allows you to tell a story and make an impression. And get this: Viewers retain 95% of a message when they watch it in a video, compared to 10% when reading text. Source: Insivia

That’s the obvious reason that video cost more. It’s worth more.

But unlike my television/billboard example, online video ads and display ads are delivered via the exact same medium – the internet, specifically, on web pages users are surfing. So besides a little bandwidth, it doesn’t really cost the publisher a lot more to serve a video than it does a static display ad. So why the big difference in cost?

CowTo use an analogy, video is like the Kobe beef of programmatic advertising.

Like Kobe beef, it’s harder to come by because there’s much less of it available. In fact, video accounts for only about one percent of all programmatic inventory.

Video is also found on premium publishers like YouTube, CNN.com, Forbes, FoxNews, ABC Family, MLB.com and others like these.

Another thing that is appealing about video is that it often appears center page and above the fold – great real estate for ensuring that users see your ads.

But what truly makes video more appetizing is that programmatic video provides additional ways you can use to measure the effectiveness of your ads.

With traditional display, you probably get a report that shows impressions, clicks and (if you’re lucky) the sites where your ads were served.

With video, you get a video interaction report that shows number of users that watched 25%, users that watched 50%, users that watched 75% of your video and users that completed the video. Some reporting even shows pause rate, mute rate, unmute rate and the number of users who watched the video in full screen mode.

If you’re used to buying television, these are metrics you’re not used to having access to. But wouldn’t that be cool?! Can you imagine a report that showed how many users actually watched your TV commercials, how many were paying attention and how many went to the fridge for fruit cocktail? Yah, that would be amazing.

CTR may tell you how many people clicked your ads, but view rates can be an even more valuable way of measuring your ads’ effectiveness.

Imagine getting a report that says only a small percentage of viewers watched more than half of your video. This could be proof that the ad is too long, or that it simply isn’t engaging enough to keep their attention.

Or maybe you get a report that shows really good view numbers. Even if CTR isn’t awesome, knowing that 20,000 people watched your video to completion is pretty powerful stuff.

To recap, video is a more powerful and memorable marketing medium than display, there’s a lot less video inventory available, ads are served front and center on premium websites and the reporting of video views outshines display’s standard impressions and clicks reports.

Thanks for reading

David McBee