UK advertisers used behavioural targeting for 6.6% of video ads in the fourth quarter last year, according to research from addressable audience platform Videology.
The report, which marks the first in a series of Videology-led research that will be published exclusively on new media age, is based on more than 300m ad impressions in the UK over a three-month period in the fourth quarter of 2011. Twinings (pictured) is a brand that recently ran an online video campaign on YouTube.
The study revealed 6.6% of video ads, representing 19.8m of the 300m ad impressions, were targeted on a purely behavioural basis in the UK.
Behavioural data was classed as location, daypart and retargeting, all of which are more prevalent in the US with 23% of ad impressions using it for video campaigns, according to the report, which spanned all sectors.
A bigger majority of UK advertisers prefer to combine both behavioural and demographic data, with 14.2% of all ad impressions served using this method, compared with 3.2% in the US.
Vivaki Nerve Center MD Marco Bertozzi (pictured) said the results show retargeting for video remains an untapped area, dwarfed by uptake in display. “If you asked the same question of display that figure [6.6] would be much higher,” he said. “Given the similarities in the way we now buy and target display and video, the question remains; why is so little being applied to video?”
The UK video-on-demand (VOD) market is still driven by TV budgets and extending the reach of TV, but that is gradually evolving, according to Bertozzi. “Until now, video has been driven by really basic audience targeting, such as age and gender – essentially what TV offers,” he said. “We’re starting to see slow shifts towards things like social-demographic targeting and really using what the internet can do, rather than what we have always done on TV. It’s all part of the same data revolution happening within display.”
Essence head of trading and media planning Rupert Privett believes third-party audience data offers much more value when used for video, the latter of which commands higher pricing than standard display. “Third-party audience data is much more attractive to planners when used to improve the targeting and efficiency of video buys than for standard display, because of the incremental cost as a percentage of the media cost,” he said.
“If you imagine a data segment that is bought at a 50p CPM, then applied to display media bought at a similar cost, so the mark-up is 100% and as such, the media will need to work twice as hard,” he said. “So unless you have a very specific segment you are trying to target, there’s a question of whether that’s actually efficient.”
However, given video is charged on a higher CPM basis, the cost of using a data segment to reach a specific audience is smaller, according to Privett. “If you’re looking at a CPM between £10 and £20, suddenly the incremental cost for using a data segment to reach a specific audience is much smaller so makes much more sense and makes the media buying much more efficient,” he said.
UK advertisers are experimenting more with different ad lengths, according to the report, with 10-second, 15-second, 20-second, 40-second and 60-second creative all recorded in the three month study. However, the dominant length is 30 seconds with 66% of ads recorded at that length.
Agencies believe the lengths used are indicative of the fact the VOD market is driven by TV, so still reliant on repurposed rather than bespoke ads. Mediacom’s associate director of Futures and Implementations Graeme Hutcheson said there is a lack of understanding over the differences between online and TV advertising, which needs addressing.
“The majority of the market uses existing TV assets because it is cheaper than creating a whole new set of bespoke formats,” he said. “The way we can use formats to enhance a campaign is far greater online than on TV. We need to move more towards ads that are fit to purpose rather than rehashing TV assets.”
However, he said more advertisers are acknowledging the value of creating video that’s specifically tailored to online platforms, although there are still challenges to overcome before it is full adopted.
“There still needs to be a bit more of an education process on the side of the advertisers and creative agencies and this is one of the challenges,” he said. “Creative agencies are used to making beautiful, glossy TV ads, and are therefore unlikely to suggest to clients its worth making a 10-15-second cut down to use online.
“But the more we learn about VOD, the more we will understand it’s not just about using a TV creative. There are other KPIs to a campaign – click-through and view-through rates might suddenly become really important and length-copy format is really key to those metrics,” he said.
MPG Contacts head of video Matt Breen (right) agreed that there is a way to go before behavioural targeting equals the use of demographic targeting because advertisers are more familiar with that kind of currency.
“A large proportion of budgets will continue to go against demographic data because that is easily convertible to a TV audience, such as an ABC1 adult, and is therefore more easily transferable in terms of currency,” he said.
The most popular age demographic to target in the UK is 18-24 year olds, according to the report, with 29% of ads served to that demographic. The 25-34 year old bracket followed with 24% and 35-44 year olds at 20%.
The fact the most popular age category for online advertising is 18-24 year olds is also a result of the VOD market being driven by TV spend.
“A lot of budget is still coming from TV and the hardest audience to hit on TV is 18-24-year-old adults – they typically watch very little of it and spend far more time online,” said Breen. “As TV is a very hard environment for advertisers to reach them, they are chasing the audience where they consume media.”