ReFUEL4: Online Video Ads Give Advertisers Laser Precision to TV's Floodlight

Online Video Ads Give Advertisers Laser Precision to TV’s Floodlight

The ability to precisely target a specific audience has long been an advertiser’s holy grail. Only in recent years, however, has a viable candidate emerged that can topple television’s vice-like grip on video advertising dollars.
Online channels in their many forms are not only that viable candidate but, for the first time, they afford advertisers the ability to hone their message and distribute it through channels that act more like a funnel than a sieve. With online video ads, advertisers no longer have to cast a massive, inefficient net to catch a few members of a specific audience.
Instead, the nature of the online environment itself organizes the masses into neatly categorized demographics, interests, and beliefs in a digitized natural selection of sorts.
Of course, that’s not to say television is likely to disappear from the landscape but, with absolute certainty, video advertising is no longer an exclusive moon within TV’s gravitational pull. The innumerable, well-defined channels provided by the digital universe has made sure of it.


A New Sheriff In Town


Television’s weakening stranglehold on video advertising isn’t necessarily its own fault. With a reign of over 60 years, it’s certainly had its time in the sun. However, anyone who thinks that TV is still the exclusive, ubiquitous outlet for video advertising needs a primer on the immediacy, power, and specificity that online video ads provide.


Over the last decade, the sheer volume of digital channels has exploded. Primarily fueled by the rise of mobile devices and high-speed internet, the online landscape has seen a complete transformation to include digital channels that appeal to nearly every imaginable interest, disposition and demographic.


Furthermore – while the vast scale of channels would usually make it difficult for viewers to find their preferred outlets – search engines, banner advertising, and simple word-of-mouth make the matchmaking of audience to channel relatively easy. No matter an individual’s personal tastes, from the silliest to most pensive, there are channels available that likely cater to them with great accuracy.


A Distracted Audience Is a Lost Audience


Another factor in the rise of online video advertising is the manner in which the audience watches them.


Millennials, the first generation to grow up with digital video as a norm rather than a rarity, watch online videos on a device as a sole undistracted activity almost twice as often as television. In other words, younger people tend to watch TV while simultaneously doing other activities but, in contrast, are much more focused when viewing videos on a mobile device. Although analyzing the differences in ROI between TV and online video advertising still requires some fuzzy math, the quantifiable trends in advertising revenue alone are enlightening.


A recent study tracked the average advertising revenue per user, ARPU, for both Facebook and television from 2012 to 2016. Facebook’s ARPU grew from seven percent the value of an average TV viewer to over 40 percent in the four-year time frame. Much of this stems from Facebook’s recent overhaul of its online video advertising platform, which now integrates auto-play and an ever-evolving set of campaign manager tools.


Such trends are never attributable to coincidence but to the rapid adoption of a transformative new presence in the marketplace. In this case, it’s evidence that online video ads are quickly gaining traction on TV’s monopoly on video ad revenue.


To further strengthen the case for online video ads, the study only included Facebook users. When the specificity of online channels is factored into the equation, online video ads might have already overtaken TV in terms of ad cost per relevant views.


The Future Is in the Palms of Your Hands


To the dismay of television manufacturers the world over, it’s clear younger generations consume entertainment on mobile devices with greater frequency than the Cinerama-like screens of their parents. And while a smartphone will likely never replace a large, crisp flat screen for watching an action movie or 4k gaming, video advertising efforts are being completely transformed by the mass migration to smaller, mobile screens. Given this adoption of smartphones as primary delivery platforms for entertainment, video advertising has already made the inevitable segue towards social media platforms as focused channels for ads.


In support of that point, a 2017 study has shown that 68 percent of video advertisers now believe social media channels are the most important partners in a digital media campaign, far surpassing even the likes of YouTube and Vevo.


With technologies that now help advertisers isolate specific demographics in digital campaigns, sometimes down to the individual level, it’s clear the future of video advertising doesn’t lie in television or even online video channels. Personalized social media platforms that provide advertisers such a wealth of user-specific data will dominate the video advertising market for years to come.


TV Is Still Viable


Television itself has made some significant strides in allowing advertisers to better target a specific audience. The splintered, highly diversified nature of cable and satellite TV has certainly categorized the viewership in a much more ad-friendly way than the days of the big three networks. Also, with advertisers able to place ads in specific programming blocks, the chances of hitting a target demographic are greater than before.


However, even with these strides, television will never be able to provide advertisers the laser-focused precision that the countless online channels provide them. As the revenue streams already demonstrate, online video advertising is a permanent fixture and will only continue to grow in scope and power.


Marketing executives are best served by accepting that fact and learning to live in a world where the barriers between traditional and digital campaigns are blurry at best.


Alexis Ng

ReFUEL4's digital and content marketer who loves the ocean, yoga and constellations. Watches too much TV.