A new report from eMarketer indicates that companies are spending more than ever on digital video ads.
According to the report, digital video ad spending is predicted to reach $27.82 billion in 2018 alone: a 30% rate of growth.
At that figure, eMarketer says, budget spent on video ads will make up a quarter of all digital ad spend in the U.S. — compared to digital ad formats like static or animated images, or text-based ads.
But where, exactly, is that money going? And what’s responsible for the uptick in companies buying digital video ads? We had a closer look at the report and collected some of our own data to find out.
Where Is the Ad Spend Going?
Much of this spending appears to be going in the direction of video ads on social media networks.
Looking at the combined video ad spend on Facebook, Snapchat, and Twitter in the U.S., Facebook is taking the lead — earning about 87% of the total. That includes video ad revenue earned on Instagram, which is owned by Facebook.
In terms of all U.S. video ad spending — within social media and beyond — Facebook earns 24.5% of the total.
Interestingly, eMarketer doesn’t include YouTube in total social media video ad spend — but does point out that the video-sharing platform, which is owned by Google, is expected to earn $3.36 billion in video ad revenue this year.
That’s less than half the amount expected to be earned by Facebook ($6.81 billion).
Why Video Ads?
To figure out what might be responsible for this growth in digital video ad spend, we wanted to take a closer look at consumer buying behavior. We asked 850 internet users across the U.S., UK, and Canada: Which ad format is most likely to lead you to purchase an item online?
Nearly half of all respondents indicated that they’re most likely to purchase an item online after seeing a video ad, over all other ad formats.
That could be one deciding factor for businesses in deciding where to allocate their ad budgets: a higher return on investment, or conversion to purchase, on video ads over other formats. And while that number might look different for each business, 64% of consumers are generally more likely to buy a product online after watching a video.
A Better Ad Experience
That could be because video ads are more likely to actually show the user how a product or service is used. Text ads can also be used to explain — but word count on these ads can be highly constrained, leaving advertisers with little real estate to capture the user’s attention. Image ads can show users how a product or service might benefit them, but only with a single snapshot.
Videos, however, can go a bit further in showing the viewer how a brand might fill a previously unmet need. They can capture multiple moments in a visual way that’s more engaging, and allows the user to imagine herself in the same situation.
Plus, more social networks are increasingly creating more ways for businesses to allow users to natively buy an advertised product (or book an advertised service) within the app.
Finally, let’s dig into that concept of a native, seamless experience. Video ads that appear on social media often do so within the same feeds that we might be scrolling for fun, or out of curiosity and boredom. In that capacity, video ads come more naturally, as opposed to something like a traditional TV (video) commercial break — where the fact that we’re viewing an ad is a bit more salient.
Plus, unlike TV video ads, social video ads allow the user to take immediate action on the ad, on the same device where they’re viewing it — to make a purchase.
“Marketers rely on in-feed video ads to capture users’ attention and build brand awareness,” said eMarketer principal analyst Debra Aho Williamson in the report. It echoes the sentiment that the users are more likely to respond to an ad that exists within something they’re already doing — making it easier for them to to become customers.
Of course, the same principles apply to video ads as they do to good content: be relevant, helpful, and meet users where they are.read more
“No one knows your customers better than you do.” We’ve all heard this old adage before, but it has never been truer than it is now.
Our ability to gather our customers’ information has never been greater, and advertisers lean into this data to fuel their ad targeting and audience creation.
In a recent study conducted by Duke University’s Fuqua School of Business, 62% of marketing leaders stated their use of online customer data increased within the past two years. 70% also said they plan on using more online customer data in the future.
When you’re creating audiences for your ad campaigns, though, you have to choose between two types of data: first-party or third-party data.
The difference between first and third-party data.
Third party data is information on individuals that’s aggregated by third-party sources and made available on advertising platforms for targeting purposes.
For instance, you might not disclose your household income online, but third-party data aggregators might be able to place you in a specific income bucket depending on other information available to them. They can then send that information back to advertising networks, where advertisers can use this data to create audiences for their ads.
For first-time advertisers, a manual targeting strategy based on third-party data is still commonplace for reaching a specific buyer persona. When HubSpot first introduced our CRM back in 2014, we relied on third-party data and manual targeting to distribute our ads to people with the demographics and interests that reflected our ideal buyer persona.
But once we started to generate visits to our site, we quickly shifted towards a retargeting strategy that used first-party data to serve extremely targeted ads to our audience.
While third-party data is aggregated data on a general group of people, first-party data is information you collect directly from your customers like their interactions with your brand. If third-party data lets you reach a broad persona, then first-party data lets you pinpoint a hyper-specific persona.
For example, you could create an audience of all contacts in your CRM who have bought one of your products or everyone who registered for and attended a webinar you ran.
You could also create an audience based on website data, like everyone who has visited your pricing page. Using CRM and website data, you can create an extremely specific ad that provides your audience with tailored content and propels them along their buyer’s journey.
The changing tides of ads targeting.
Both first- and third-party data have their place in your advertising strategy, but it’s important to make sure your data is verifiable. Since first-party data comes directly from your customers, you can rest assured it’s accurate information that you can segment your audiences with. Third-party data and its use in ad targeting, however, is becoming more and more suspect.
A recent Ad Age study found that 75% of advertisers don’t fully trust their third-party data sources and 65% don’t understand the source of their third-party data.
This uncertainty surrounding third-party data, coupled with recent regulations like GDPR, has signaled a shift away from third-party data as a primary source of ads targeting and audience creation.
As a result, internet browsers like Safari and Firefox are making it more difficult for companies to track your activity as you browse the internet. Networks like Facebook have even removed third-party data targeting options from their ads manager.
With this move away from third-party data, it’s now more important than ever to use the data you directly collect from your customers to create your advertising audiences.
Audience options that use first-party data.
When using your own customer data to target ads, ad networks provide a few different options for you to use. But, in general, using a CRM in tandem with an ads management tool is the best way to leverage your customer data and create high-performing audiences at scale.
First, you can create ad audiences of your website traffic. Whether you’re using the Facebook Pixel or the Google Site Tag, embedding this piece of code on your site lets you track visitors and create audiences based on their interactions with your website.
With this information, you could go as broad as creating an audience of anyone who has visited your entire site. Or you could get granular and create an audience of people who have visited a specific page or groups of pages.
To optimize your ad, you’ll want to match its content offer and optimization event with your audiences interests.
For example, if you’re targeting all the visitors of your entire site, you could create ads that provide your audience with specific blog posts and are optimized for page visits. If you’re targeting visitors of your pricing page, you could offer them a discount and optimize the ad for sales.
Ad networks also give you the option to create custom audiences based on specific data you have collected on your customers over time. This could be anything from the information you’ve gathered through forms to your customers’ interactions with your marketing emails.
For instance, you could create an audience of everyone who opened but didn’t click through to one of your marketing emails and create an ad that targets these particular people.
But if visits to your website or possessing contact information in your CRM is a prerequisite for creating ads audiences, how do you expand your reach and acquire new leads? This is where lookalike audiences come into play.
Instead of creating an arbitrary persona based off general demographic characteristics, lookalike audiences let you take an audience you’ve already seen success with and tell ad networks to go out and find individuals who exhibit similar characteristics as these people.
Lookalike audiences can also be used at every stage of your buyer’s journey. At the beginning of your buyer’s journey, when people are just getting familiar with your brand, you can combine a lookalike audience with your Facebook Pixel to drive more traffic to your website.
Later in the buyer’s journey, you could take a list of your most qualified leads based on interactions with your marketing materials and create a lookalike audience to attract more qualified prospects to your brand’s bottom-of-the-funnel content.
Putting ads targeting into practice.
What does a first-party data targeting strategy look like in the real world? Let’s say you’re going to run a campaign with a focus on driving qualified leads to your sales team. You could host a webinar and create an e-book to pre-qualify leads. You could also create a number of blog posts to raise awareness for your brand and solutions.
At the beginning of your campaign, you could blend your website traffic audiences with lookalike audiences to expand your reach. You could also boost your organic social posts to see which content resonates with your audience and then create lookalike audiences of people who interacted with those specific pieces of content. The goal here is to raise awareness for your brand’s solution and drive traffic to your website. These ads should be optimized for page visits.
Once you have driven traffic to your website, you’ll want to create retargeting audiences based on your web traffic and target them with your two pre-qualifying offers (the webinar and e-book download). You could also create different audiences for each of your offers.
For instance, you could distribute your webinar offer to an audience of previous webinar attendees and your e-book download to people who have visited specific pages on your website.
That said, don’t forget to test different combinations of audiences, ad creative, and content offers. Experimentation is the most objective way to determine what will resonate with a specific audience you create.
Additionally, remember to keep experimenting with lookalike audiences. You could also add a layer of demographic targeting to get even more granular with your ad creative or content offers. With these types of ads, they should be optimized for conversions, either for webinar sign ups or e-book downloads.
Now that you have a good number of people who downloaded your e-book or registered for your webinar, you can create custom audiences based on these groups of people.
At this point, your ads could offer these leads an opportunity to speak with your sales team, a coupon, or a specific deal. You could also experiment with creating lookalike audiences and target that audience with an offer to speak with sales.
Since those individuals will resemble leads that have interacted with your pre-qualifying offers, they might already be ready to speak with your sales team. These ads should be optimized for sales.
Taking matters into your own hands.
Based on the uncertainty and skepticism of third-party data, it’s now time to double down on using customer data for ads targeting. Using first-party data to create audiences will enable you to be as helpful and relevant at every stage of your customer’s buying journey, producing successful results with your ad campaigns in 2019 and beyond.read more
By Alfred J Nigl, Ph.D. and Dean Grey Although the future of using AI and Machine Learning in social media remains in doubt due to the global data privacy legislation, AI and Machine Learning are still being applied by social media businesses to help them understand,...read more
by Alfred J Nigl, Ph.D. and Dean Grey In a recent paper, the authors discussed how Skylab USA leverages the power of SDT to maximize engagement behavior across its various business units (or planets in the Skylab vernacular). In fact, the very high engagement levels...read more
Most apps are abandoned within the first 90 days; in fact, apps lose 80% of their users by that time and even more striking is the fact that 50% of all users who uninstall an app do so in the first 4-5 days. Another sobering statistic is that half of all apps are...read more
Alfred J Nigl, Ph.D. and Dean Grey Skylab is one of the world’s most robust, white-labeled social media engagement platforms and was created to leverage the principles of the science of engagement. Its scientific foundation seamlessly integrates and operationalizes...read more
Game theory principles and strategies have been applied by a variety of social media platforms as a method of increasing user engagement, satisfaction and motivation. This is often referred to as “gamification” or the application of game theory and gaming technology...read more
Business in the modern age is seismically different compared with even five years ago. Businesses have been profoundly changed by the influx of digital-based processes and systems required to work and grow effectively.
A wide mix of digital technologies has now become integral to most business functions, with software taking over even human-based roles in some instances. Digital transformation will be key to all business growth: International Data Corporation (IDC) forecasts suggest that 60 percent of the Forbes Global 2000 will have doubled their productivity by 2020 due to digitization and the adoption of technology to streamline processes.
With the largest companies in the world and CEOs of all brands seeing growth and digital transformation as strategic imperatives, even the smallest brands should follow suit and embrace the need for all things digital.read more
With a lot of unsold inventory and not enough advertisers to buy it, Twitter is trying to address its demand dilemma.
Over the summer, Twitter began testing a subscription-based ad-buying program through which brands could opt to pay Twitter $99 a month and have the company promote their accounts and tweets for them. Now the company is opening up the program to all accounts in the US and United Kingdom, including businesses and individuals, Twitter announced on Wednesday. Brands that use Sprout Social to manage their Twitter accounts will also be able to enroll, and the company eventually plans to open it up to accounts in Japan.
The program is aimed at businesses and individuals with small followings who are looking to grow their presences on Twitter. “On average accounts will reach 30,000 additional people and add 30 followers each month,” according to the program’s help section on Twitter’s site. The program marks Twitter’s subscription-based ad product, but may not be its only one for long. According to the help section, “in the future, higher price and promotion tiers will be available for people with larger followings.”
Other than a name change to Promote Mode, the subscription-based ad program is largely unchanged from the version Twitter began testing over the summer. It still costs $99 a month. In return for that money, Twitter will still run up to the first 10 tweets an account posts each day (not including retweets, quote tweets and replies) as Promoted Tweets as well as Promoted Account ads. Advertisers still cannot pick which tweets get promoted as ads. Advertisers still can only target their ads based on people’s interest or the metro area or region in which they are located, but they cannot use the two targeting categories simultaneously.
However, some things have changed.
First, participating advertisers can opt to pause their campaigns so that any organic tweets sent while on pause will not be eligible for promotion until Promote Mode is unpaused.
Second, brands that enroll in Promote Mode will still be able to buy ads through Twitter’s self-serve ad-buying tool; if a tweet is promoted by Twitter through Promote Mode and also run as a targeted ad through Twitter’s Ads Manager, the two ads will be treated as separate campaigns, according to a Twitter spokesperson.
Third, Twitter is incorporating Promote Mode into its mobile apps. It’s available through its in-app menu; tapping the icon will open a dashboard outlining how Promote Mode campaigns have performed so far that month. Advertisers can see how many people they reached, how many followers they added and how many people checked out their profiles.read more
Consumers are bombarded by hundreds of competing messages every day, many of which lack any specific relevance to them. As they become more and more fatigued from this excess noise, consumers are becoming more adept and emboldened to tune out all of a brand’s marketing efforts if they miss the mark.
In fact, a recent study showed 94 percent of consumers have discontinued a relationship with a brand after receiving irrelevant messaging.
Growth marketers must create “omni-channel relevance” by creating one-to-one personalization that is consistent across all channels and at scale. Inside the Growth Marketer’s Playbook from Iterable, we walk through each of these channels — email, direct mail, mobile, web push and social media — and discuss best practices for captivating your audiences, activating your data and automating intelligent campaigns.
Visit Digital Marketing Depot to download “The Growth Marketer’s Playbook to Achieving True Omni-Channel Relevance.”read more