You’ve got an awesome product, and now you want to get the word out. But for all the money you’re pumping into online advertising, the sales just aren’t coming. Your conversion rate is in the gutter; the numbers just don’t add up.
Effective advertising is something all smaller businesses struggle with. It’s so tough that 60% of annual digital ad spend is actually wasted, according to LinkedIn.
But it doesn’t have to be that way.
Done right, online video advertising can help you increase sales, raise brand awareness, and create loyal customers. Done wrong, and you’ll burn through your video advertisement budget with very little to show for it.
That’s why we created this guide. Read on and we’ll show you how to run profitable ads that generate customers, build a sustainable ad strategy, and grow your bottom line.
So why Viddyoze? As a video software company, we’ve dedicated a lot of time to video ads. In fact, we once spent $1 million dollars on ads in 30 days, making a colossal profit as we did.
- What Is Online Video Advertising?
- Advantages And Disadvantages Of Online Video Advertising
- Video Advertising Statistics
- How To Plan Your Ad Campaigns (In 4 Steps)
- Online Video Advertising Platforms
- 10 Types Of Video Advertising Formats
- How To Create Ad Creative That Converts Watchers
- Video Advertising Best Practices, Tips, And Ideas
- Online Video Advertising Examples
- Final Thoughts
What Is Online Video Advertising?
Online video advertising is a digital marketing tactic in which businesses pay third-party platforms to display their marketing videos to the active users on that platform
This type of advertising is very effective and can be used on social media platforms, search engines, and websites. Generally speaking, most businesses use online video ads to drive traffic, increase sales, and build audiences.
Advantages And Disadvantages Of Online Video Advertising
|Can generate new leads instantly||Customer acquisition costs can be expensive|
|Advanced targeting features (to reach your ideal customer)||First-time setup can be complicated for beginners|
|Can turn off the ads whenever you choose||You stop generating new leads immediately after turning off|
|Full reporting and analysis||Requires frequent management and testing|
|Ability to easily reach new audiences and demographics||New video content needed regularly to achieve the best results|
Video Advertising Statistics
- Online video ads spending will grow to $78.5 billion by the end of 2023
- Digital video ads are 27.4 times more likely to encourage click-through than standard banner ads
- 2 out of 3 small businesses use digital advertising to obtain new customers
- People are 2x more likely to buy something they saw on YouTube – Google
- 88% of people made a purchase after watching an explainer video (in total, 96% of consumers say they watch this type of video)
How To Plan Your Ad Campaigns (In 4 Steps)
- Define Your Customer Avatar
- Let Your Customer Avatar Guide Your Targeting Settings
- Set A Target Customer Acquisition Cost
- Choose Your Ad Platforms And Don’t Recycle The Same Creative
1. Define Your Customer Avatar
A customer avatar is an in-depth profile of your ideal customer. This is your go-to sale– the person you know like the back of your hand. Creating an avatar allows you to really refine your marketing message, which is built around basic information, such as age, gender, location, and occupation.
There are two main ways to create a customer avatar. The first is by using customer data you already have – for example, from your website database or social channels. You can also collect this through questionnaires, or marketing focus groups. If that’s not possible, you can build an avatar based on the type of customer you want to attract.
In this case, ask yourself the following types of questions:
- Where does my ideal customer live?
- What do they do for a living?
- How old are they?
- How much disposable income do they have?
- Where do they spend their time online?
2. Let Your Customer Avatar Guide Your Targeting Settings
Now you know exactly who you’re talking to, it’s time to target them directly. Using the data you’ve collected (age, occupation, location, hobbies, etc), narrow your video ad campaigns to focus on consumers with those specific characteristics.
By sticking to one type of customer, you’ll see a much greater return in ROI and reduce your customer acquisition cost. All of the major ad platforms, including Google and Facebook, allow for this kind of targeting.
Why? Because you’re targeting the people most likely to buy your product instead of blowing budget on uninterested parties. After all, targeted advertising is twice as effective at converting users into buyers (Network advertising Initiative).
3. Set A Target Customer Acquisition Cost
Next, you’ll need to set a customer acquisition cost (CAC) for your video advertising. This is the amount you’re able to spend on winning a customer, while still making a profit. This way, you’ll be able to see whether or not your video ads are profitable or not.
So what’s a good return on ad spend (ROAS)? The industry standard is 3:1 (revenue:CAC). That means if you generate $3 for every $1 spent, your digital video advertising strategy is working well. Generally, the 3:1 formula is a good place to start when it comes to setting your CAC. In this scenario, the CAC should be a third of the revenue generated by a single sale.
Depending on your product, you could also use a lifetime value (LTV) model. Take Netflix as an example. The streaming service uses a subscription-based model. For argument’s sake, let’s say the average customer pays $10 a month for a period of 12 months. The LTV of that customer is $120, with a $40 CAC (ROAS = LTV/CAC).
With business models like this, where there’s a high LTV, short-term loss on advertising spending isn’t as big of an issue. For example, Netflix could lose money on acquiring a customer in the first month, but still go on to turn a profit later.
4. Choose Your Ad Platforms And Don’t Recycle The Same Creative
Each major social media network has its own ad platform. When building a video ad strategy, it’s important to select the right platforms for your business.
Most marketers opt for Facebook (which also owns Instagram) and YouTube (owned by Google) as they have the biggest user bases. Between them, they reach a staggering 5 billion people each month. TikTok, meanwhile, is ideal for brands targeting a younger audience; LinkedIn works for B2B businesses.
It’s also worth noting that just because a video advert is super successful on one platform, doesn’t mean it will be on another. For example, TikTok users have completely different demographics, likes and dislikes compared to LinkedIn users.
Tweak your video content creative constantly and make sure it speaks to the audience for each individual platform. Finally, be sure to run ads formatted for both desktop or mobile devices.
Online Video Advertising Platforms
Digital video ad campaigns are most effective when used with social. Not only can you use online video advertising to drive sales, but you can also engage consumers, reach a new target audience, drive brand awareness, and increase engagement.
Here are the 7 major platforms you should be targeting:
With 2.9 billion monthly Facebook users, the world’s most popular social network covers a broad spectrum of society. While its largest user group is aged between 25 and 35, it’s also the most popular social network for people over 50.
The platform uses a newsfeed display, which is where most video ads appear. As a result, the most effective type of digital video advertising for Facebook is native video ads. These appear like organic posts and perform best in a vertical or square format.
YouTube, powered by Google Ads, also has tremendous reach, with 2 billion active daily users. It’s widely popular with almost every demographic.
93% of U.S. adults aged between 18-49 claim to be frequent YouTube users. YouTube’s popularity also extends to the elderly with 49% of U.S. adults over-65 claiming to watch YouTube.
YouTube video ads come in all shapes and sizes, but the most effective is the non-skippable in-stream video ad. These play during or before a YouTube video, and cannot be skipped by viewers. Video ad sequencing tends to work very well with YouTube ads.
The majority of Instagram users fall between the ages of 18 and 34, making it a great place to target Gen Z and Millennial consumers. As an added bonus, audiences here tend to be highly engaged, with 90% of users following at least one brand.
Like Facebook, native video ads tend to perform best because they don’t disrupt the user experience. Carousel video ads are also popular, while Instagram Reels and Stories both have their own ad formats, too.
Targeting a professional or B2B audience? LinkedIn is the place for you. The majority of users here are aged 25 to 34 (60%), followed by 18 to 24s (20%) and 35 to 44s (17%).
Native video ads are the most effective type of advert for marketing on LinkedIn.
Reddit’s user base is hyper-engaged, creating a more informed user and more valuable buyer for brands. The perfect place then, for digital video advertising. The largest user group is those aged between 18 and 29 (60%), followed by 30 to 49s (29%).
Native ads are the most effective type of online advertising, and they can appear in the feed or within conversations. Carousel video ads are also useful.
Since its US launch in 2018, TikTok has been bucking digital video advertising trends left, right, and center. Despite only hosting ads a few years ago, the platform has already become one of the most engaged social networks for advertising.
The largest demographic on TikTok is those aged between 18 to 25. However, 62% of Tiktok’s user base is aged between 10-29.
Native (or In Feed, as they’re known on the platform) are one of the most effective types of video ads used on TikTok.
Twitter’s demographics are similar to Facebook and YouTube. In the last few years, the platform has seen a shift towards online video, with 2 billion video views taking place every day (Twitter).
Twitter hosts three types of social media video ads: video ads (native, in-feed posts), amplify pre-roll (ads that play before a longer post), and video ads with website buttons.
10 Types Of Video Advertising Formats
- In-Stream Ads
- Video Ad Sequencing
- Native Video Ads
- Video Carousels
- Collection Ads
- Messenger Ads
- Stories Ads
- Lead Form Ads
- Non-Linear Video Ads
- Reward Ads
1. In-Stream Ads
A YouTube staple, in-stream ads appear before or mid-video. These ads can be unskippable (a user has to watch them access online video content), or skippable after 5 seconds. They also appear on Facebook, Twitter, and some other platforms.
What’s great about these ads is that they’re cost-effective and they’re great for targeting specific audiences. That said, some users find these annoying and they can cause negative brand sentiment, if overused.
2. Video Ad Sequencing
Video ad sequencing allows you to control which ads the watcher sees. It’s primarily used on YouTube, but you’ll also find it on Facebook, LinkedIn, and other platforms. There are a few ways it can be used.
One is to split up longer online ads into shorter snippets that play in sequence. For example, a five-part ad sequence set to play over a longer YouTube video. If a user skips your first ad, you can send them to an alternative ad.
You can also create a bespoke viewing experience for each user. For example, if a user watches your whole ad, you can serve them with a web page in order to convert them quicker. You can also drop a user out of a sequence if they’re not engaged.
3. Native Video Ads
Native ads appear in social media newsfeeds, just like any other post. The idea here is that your video campaigns look just like any other post, hence the name “native”. Almost all social platforms support this video format, making it one of the most common video ads out there.
These are great because they don’t disrupt the user experience; they work well as brand awareness ads. On the flip side, they blend in with the rest of the news feed, so your marketing strategy and creative need to be really on point to stand out.
4. Video Carousels
Popular on Facebook and Instagram, video carousels allow you to post multiple short videos in one post. The user is prompted to scroll through the carousel to find out more.
Video carousels are much more product-focused. You can use them to highlight a range of products, show off the same product in different colors, or showcase the many benefits of one item. Due to the hard-sell objective of these ads, conversion rates are low on the whole, and they achieve a limited set of marketing goals.
5. Collection Ads
Collection ads are similar to carousel ads, but they’re only available for mobile devices. They allow you to host a video with a series of products appearing in a carousel below.
Once a user clicks the collection ad, it expands to fill the whole screen, while they also support in-app purchases on some platforms, such as Facebook. These video campaigns can be very profitable, but they often require a lot of paid spend to get off the ground.
6. Messenger Ads
Send videos directly to a user’s inbox with messenger ads. This can be done on any social platform with a messenger service, including Facebook, LinkedIn, and Twitter.
The big pro for messenger ads is that they create a direct line of conversation between your company and a consumer. On the flip side, some people find them annoying and intrusive.
7. Stories Ads
One for Facebook and Instagram. These ads play in between organic user posts within the popular “Stories” sections of both apps. They’re designed to be short, sweet, and easy to understand.
Stories ads work well on mobile because they’re formatted vertically. Due to where they appear, sandwiched between genuine user stories, these ads create a sense of authenticity, while driving awareness. Cons are that the CTA is often unclear, making the posts less clickable.
8. Lead Form Ads
These ads are a super effective way of capturing consumer information, such as names and email addresses. Once a user clicks on a video ad, the lead form automatically appears, prompting them to input important data.
Such ads have a high completion rate because they operate within desktop and mobile apps. In other words, lead form ads don’t disrupt the user experience by transferring them to another website.
9. Non-Linear Video Ads
Non-linear ads play at the same time as a video, without disrupting the main content’s playback. These most commonly appear as a banner video, but can also be used in image and text format.
The major pro for non-linear videos is that they are unobtrusive, supporting a better user experience. However, if a user doesn’t like your ad, it can lead to negative associations for your brand.
10. Reward Ads
Ever played a mobile game that encourages you to watch an ad in return for a small reward, such as an extra life or tokens? That’s a reward ad, and most modern game apps use them.
Given the reward, these ads have a great completion rate. However, they’re only really effective within an app that can provide a worthy prize (for example, the language learning app, Duolingo awards tokens that users can make in-app purchases with).
How To Create Ad Creative That Converts Watchers
Every year businesses waste thousands of dollars on ads that won’t convert.
The biggest cause behind this is not having experienced video marketers on staff who know how to create scroll-stopping video creative.
That’s why so many small brands are turning to Viddyoze.
Our easy-to-use software solution allows you to create pro-level videos in a matter of minutes – that make people want to buy your products.
Using our platform, advertising with video has never been simpler.
All you need to do is logon to our app, choose a video template from our library, add your text, then download and post. It really is that easy.
Give your ad campaigns a boost and make more sales by leveling up your ad creative. Start creating online video advertisements with Viddyoze now or watch the video below for more info.
Video Advertising Best Practices, Tips, And Ideas
- Send Visitors To A Conversion-Rate-Optimized Landing Page
- Hook Watchers During The Unskippable Part Of Your Ad
- Sell The Product’s Benefits Not Features
- Subtitle Your Videos
- Format Your Videos For Each advertising Platform
- Call Watchers To Action
Send Visitors To A Conversion-Rate-Optimized Landing Page
A great ad is only as good as the landing page it links to. Without the latter, you could be sending tons of clicks into a digital abyss. To maximize your conversion rate, ensure the page your clickers land on is optimized for the sale (easy to use and understand with a clear user journey), with similar messaging and copy to that of your advert.
Hook Watchers During The Unskippable Part Of Your Ad
7 seconds. That’s pretty much all you have to hook a user into your ad. After that, they can skip your in-stream ads and never give it another thought. Give them a reason to stick around. Front-load those first few seconds with the most important information about your product or brand.
Sell The Product’s Benefits Not Features
Modern attention spans are shorter than ever, so don’t try to reel off a long list of hard-to-understand technical jargon in the first few seconds of your ads. Instead, focus on how your product will benefit your viewer’s life.
- Don’t say: This laptop has 20gb of ram with a new Intel processor!
- Do say: This laptop allows you to stream videos in 8K HD WITHOUT buffering!
Subtitle Your Videos
Social networks autoplay all videos with the sound off to avoid noise clashes in the newsfeed. As a result, the vast majority of people (92%, according to Verizon Media) watch videos with the sound off. To make sure your message gets across, subtitle all videos. That way, they’ll stand out, even on mute.
Format Your Videos For Each advertising Platform
Every platform supports its own format – that’s the size (in terms of data) and the width (pixels). Before you create your ad, take the time to get this right for each platform. If you don’t, your ads won’t look right in a user’s newsfeed, and they’ll stand out for the wrong reasons.
Call Watchers To Action
Every single video you create should contain a strong call to action (CTA). Whether you’re looking to capture an email address or reinforce purchase intent, it’s marketing best practice to tell your user what to do next.
Online Video Advertising Examples
Carvana – We’ll Drive You Happy™ – “Driving Happiness”
Funny and friendly, this ad from Carvana would work best as a native ad. It’s short and sharp, getting to the brand’s USP quickly. This ad hypes the benefits of selling a car quickly and easily, which, in the end, makes the customer happy.
Shopify – Skip The Bank With Shopify Balance
Shopify allows vendors to set up online shops in a matter of minutes. With this advert, Shopify is creating content for a slightly different consumer pain point – small business financing. The ad is quick to get to the point, highlighting benefits, not technical financial details, and would work well as a native ad or in-stream ad.
By now, you know that videos help sales (74%, according to Wyzowl) and that paid advertising is a must for small businesses (PPC drives twice as much traffic than SEO, Wordstream).
So, putting the two together is a no-brainer.
Compelling content makes for great ads. With Viddyoze, you can make more video content than ever before, while boosting revenue, driving brand awareness, and creating loyal customers.
Make incredible ads in minutes with Viddyoze. Sign up now and kick-start your ad strategy.