You might think it’s simply common sense to place ads at the beginning of a piece of premium on-demand content, rather than in the middle.
Not only is it less fiddly in technical terms, but more importantly, running ads at the beginning means you don’t antagonise video viewers half-way through just as they’re getting absorbed in the flow of a piece of premium long-form content. And that’s only sensible, given (as everyone knows) that the online audience is more resistant to interruptive advertising than the ‘linear’ TV one – hence the boom in adoption of Internet ad-blocking technologies.
That common sense view has certainly been the consensus until recently, with figures from ad tech company Ooyala showing that three-quarters (75%) of online video ad placements consisted of pre-rolls in February 2015, against just 20% for mid-rolls.*
But Ooyala’s research also shows that preference is fast disappearing: it has discovered that by April 2016, mid-rolls had risen 25% to account for nearly a third (33%) of video ad placements, reducing pre-rolls’ slice of the pie to just 60%. If the trend continues to develop in the same way, mid-rolls will have become the dominant form of online ad placement by the end of 2016.
So what’s responsible for the switch?
Recently, Ooyala’s Strategic Media Consulting team carried out research for a Nordic broadcaster to test and analyse their audience drop-off rates based on ad placement and content length.
Ooyala found that there was “a significant amount of drop-off occurring before videos even started”, attributing this to the broadcaster’s “heavy pre-roll ad load strategy”. The broadcaster subsequently decided to remove pre-roll ads altogether, and substitute mid-rolls, even increasing the length of mid-roll breaks in some cases for certain types of content. “As a result, they achieved both higher ad load and higher engagement,” Ooyala said.
The company notes that this case study is in fact completely in line with other research carried out in 2013 by Akamai and the University of Massachusetts, which showed that viewers are five times more likely to abandon a pre-roll ad mid-stream than a mid-roll.
Ooyala attributes the phenomenon to two factors: first, by the time a mid-roll ad comes up, the viewer is “already invested in the content,” so keeps watching. Second, says Ooyala, “[online] mid-roll ads look and feel a whole lot like TV. To a degree, people are accustomed to ad-breaks in video, especially with long-form, premium content like episodic series.”
In other words, contrary to what one might think, the fact that people are involved in the action makes them more willing to sit through a half-way ad-break, particularly when the online video content in question is more TV-like – which is to say, more premium and long-form.
This suggests in turn – although Ooyala doesn’t say so – that if and when Netflix decides to introduce advertising, it might not be such a turn-off if the SVOD provider heeds the evidence and adopts a mid-roll-focused advertising approach.
Ooyala found separate evidence that the online video environment is becoming more TV-like by measuring ad impressions for each ad placement between Q1 2015 and Q1 2016, and also looking at how long viewers stayed with the ads before dropping off.
While, as already noted, the total amount of mid-roll ads grew 25%, Ooyala’s data shows mid-roll ad impressions more than doubled year-on-year, increasing by 110%. This is in line with a 90% average ad-completion rate across Ooyala’s premium customers and, the company says, shows that “online ad engagement is closing in on TV.”
Advertisers have already realised this, Ooyala says, and are “increasingly requesting that online video inventory be packaged into TV ad campaigns.”
As evidence, Ooyala cites IAB’s third annual Video Ad Spend study, which showed that of 360 marketing and media-buying executives surveyed, 72% said they were planning to move funds out of TV and into digital video.
* Ooyala looked at the total number of ads, broken down by each ad placement, across nearly 50 global premium publishers and broadcasters between February 2015 and April 2016. It used the same range of customers and time-period to measure ad impressions and ad-completion rates.
Photo: Ooyala statistics showing the rising popularity of mid-roll ads within online video.