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Driving engagement:Research into the factors that determine

success in online video advertising

A Tribal Fusion White PaperBy Graham Ratcliffe, client strategy manager, Tribal Fusion UK

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www.tribalfusion.comDriving engagement: research into the factors that determine success in online video advertising

By Graham Ratcliffe, client strategy manager, Tribal Fusion UK

Contents

Introduction 1Key findings 2Methodology 3Research findings 4

A: User engagement trends by time

i. Annual trends

ii. Daily trends

iii. Hourly trends

B: User engagement trends by vertical

C: User engagement trends by content channel

D. Social sharing

E. Video audiences

Glossary 12About 13

Tribal Fusion

Firefly Video

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Digital video advertising has long been a great hope for the digital industry. Since the rise of YouTube in 2005, agencies, providers, and advertisers themselves have looked to video formats to combine the high impact of TV executions with the interactivity and measurability of online and drive further growth in the sector.

Tribal Fusion’s Firefly Video format was built for this purpose and after a year in the market it has been used by more than 50 brands across the full breadth of industries. We can now report on how video engagement rates differ across many criteria and reach conclusions about just what makes an effective campaign in terms of video and that other great hope: engagement.

This paper explores how user engagement rates with this type of next-generation video ad format vary by time, day and month, and by industry and channel. It also analyses the frequency with which Firefly Video users have shared ads via social network sites - one possibility of the unit, as well as how data shows that video engagement formats have real impact at the early stages of a user’s journey from awareness to acquisition.

We hope it helps advertisers and agencies develop evermore-effective online video campaigns.

Graham RatcliffeClient strategy manager, Tribal Fusion UK

Introduction

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Behavioural targeting, online-specific creative assets and brand recognition generate an increase in engagement rates

Users are more likely to engage in online video teaser ads on Sundays. Between Monday and Saturday, engagement rates decline User engagement rates peak between 6pm and 8pm

Known brands featuring in ads in the FMCG industry have higher engagement rates and a higher proportion of users that view 100% of the video

Good creative is crucial to encourage engagement and to persuade users to view videos to completion

Video engagement rates are much higher when users are engaging in leisure activities

Facebook is the most popular social network for users to share videos

A user’s decision to share a video via social networks is almost entirely determined by the quality of the creative

Engagement video is a powerful tool for reaching a broader range of consumers at an earlier stage of the purchase funnel. It helps raise brand awareness, even if it might not lead to an immediate increase in a brand’s website traffic

Key findings

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The findings below review a year’s worth of data on the use of the Firefly Video ad platform. Firefly Video is a next-generation video ad format that starts in a traditional IAB ad unit but expands on clear user roll-over into a full-page, multi-purpose, video and interactive execution.

Priced on a CPE (Cost per Engagement) model, Firefly Video is planned, targeted and optimised across the Tribal Fusion ad platform and has been used by more than 50 brands on a wealth of campaigns to combine high-resolution video, social apps, games and content in one unit and so meet all manner of strategic and tactical marketing objectives.

It is the data from these campaigns that has been collated to produce general findings on the factors that drive success in the use of video engagement advertising.

Methodology

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A: User engagement trends by time

i. Annual trends

The rate at which UK users engaged in Firefly Video campaigns over the 12-month period fluctuated considerably (Figure 1). While many Firefly Video campaigns have only been targeted towards teaser engagements – often using existing TV creative – it is important to note how factors such as behavioural targeting, online-specific creative and brand recognition generate peaks in engagement rates.

The first peak, in July 2010, shows how a campaign for a consumer electronic product gained greater engagement when it was targeted behaviourally. In October and November 2010, an original campaign – whereby the creative included a flash racing game rather than a video – generated a second peak in engagement rates. Finally, when a well-known FMCG brand ran a Firefly Video campaign in March 2011, the fact that many users recognised the brand encouraged a greater level of engagement.

Key findings: Behavioural targeting, online-specific creative assets and brand recognition generate an increase in video engagement rates

Research findings

Figure 1 – UK Firefly Video engagement rate (May 2010 – April 2011)

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Figure 2 – Average engagement rate by day of week(May 2010 – April 2011)

A: User engagement trends by time ii. Daily trends

The analysis also considered the level of user engagement on different days of the week, a factor often overlooked by digital marketers.

Comparing all Firefly Video campaigns posted during the 12-month period, it is significant that, while the highest number of engagements is achieved on Fridays and Saturdays, the engagement rate is actually at its lowest point on these two days (Figure 2). The analysis shows that internet users engage with ads less and less as the week progresses, rising to a peak on Sundays – a day when internet users tend to have more free time.

These findings are reinforced by data showing the percentage of internet users that viewed between 50 and 100% of the Firefly Video campaign by day of the week. Between Monday and Saturday, the proportion of users viewing over half of the video campaign followed a steady downward decline, while on Sunday, this figure climbs upwards (Figure 3).

Research findings

Figure 3 – Average percentage of users viewing between 50% and 100% of video(May 2010 – April 2011)

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Figure 4 – Average engagement rate by hour of day; Sample of 5 UK campaigns(Dec 2010 – Jan 2011)

A: User engagement trends by time iii. Hourly trends

Much research has been undertaken into the time of day when consumers are likely to be more receptive to online advertising. In Feburary 2009, the IAB published a report, ‘Receptivity of the Online Audience’, which surveyed users as to what time they would be more attentive to digital advertisements. 1This report found that users claimed they would be more likely to pay attention to such ads after 6pm. Considering a two-month period, between December 2010 and January 2011, analysis of the timings and levels of engagement with a sample of five Firefly Video campaigns concurred with the IAB’s findings: there is a peak in engagement rates between 6pm and 8pm (Figure 4). As for the rest of the day, between 9am and 10am, engagement rates are relatively low. This could be because many internet users have only just entered the office during this period, and they deal with work-related demands first. The lower engagement rates during this timeframe at the weekends could reflect that users may sleep until later and have breakfast later than usual on Saturdays and Sundays. During the working hours of 11am and 5pm, the sample shows that engagement rates are stable, while another interesting finding is that, while engagement rates decrease beyond midnight, they do not disappear altogether.

Key findings: User engagement rates peak between 6pm and 8pm

1Lightspeed and IAB UK Conduct Research into the Receptivity of the Online Audience, 23 February 2009

Research findings

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B: User engagement trends by vertical One of the key factors influencing user engagement rates is the content of videos posted online. To analyse how different industries capture different users’ attentions, it is important to consider which sectors are promoting their goods and services online.

By grouping Firefly Video advertisers into separate industries, and considering user engagement rates by industry over the 12-month study period – indexing industries using average engagement rates as a reference point – several sector-specific trends emerge (Figure 5):

FMCG advertisers gain the highest levels of interaction. Research shows that the FMCG sector has an average engagement rate around 70% higher than other users of Firefly Video. This would suggest that brand recognition is a key driver of these high engagement rates

Automotive and Charities also gain users’ attention. The fact that Automotive and Charities’ offerings are usually engaging and contain creative content helps explain how these two sectors rank second and third, respectively, in terms of engagement rates

PC games are gaining ground. With a strong online following, considerable investment in digital marketing and highly creative content, PC games rank highly in terms of user engagement rates

Entertainment posts a poor performance. Film and TV both score poorly, reflecting market saturation and the fact that internet users often access this content elsewhere (in the cinema or on their television)

Internet, Software and Telecoms are below average. Low engagement rates here show a need for more creative campaigns, or suggest that these messages appeal to only very narrow audiences

Recruitment lags behind. Multiple online recruitment messages mean that internet users are saturated with recruitment campaigns, explaining their low engagement rates

Research findings

Figure 5 – Weighted average engagement rate by industry (May 2010 – April 2011)

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B: User engagement trends by vertical When considering the proportion of users that watched a Firefly Video to completion by industry (Figure 6), the most popular videos are largely similar to the sectors that had the highest engagement rates, with FMCG leading the fray. The data relate to video viewing between December 2010 and April 2011.

Other above average sectors where more users watched a Firefly Video to completion include Film, Finance, Telecoms and Consumer Electronics. In the case of Film, the quality of the creative is generally highly engaging, which helps explain why users watch videos to the end. Finance, Telecoms and Consumer Electronics, meanwhile, often use video to explain complex topics, perhaps offering a users’ guide to a piece of hardware or an explanatory video about credit card interest rates. Once a user has chosen to engage here, it is likely they have a specific reason for doing so, and will continue to watch the video until its completion.

There are multiple reasons why a user may or may not choose to watch a video to completion, factors that average viewing times conceal – the most obvious explanation being that a video is uninteresting and lacks creativity. Users may not view the full video because it requires an action, such as calling for viewers to ‘click to enter’ or ‘share with your friends’. One other reason why users may not watch a video ad to completion is the type of creative: an interactive unit, one that encourages users to explore the product or service in full, such as a virtual online test drive for a brand of vehicle. This example could explain why the automotive industry posts a relatively low proportion of users that have viewed 100% of the video.

Research findings

Key findings: Known brands featuring in ads in the FMCG industry have higher engagement rates and a higher proportion of users that view 100% of the video. Good creative is crucial to encourage engagement and to persuade users to view videos to completion

Figure 6 – Proportion of users viewing 100% of video split by industry versus overall average (Dec 2010 – Apr 2011)

Proportion of users veiwing 100%

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Figure 7 – Average engagement rate by channel; Sample of 5 UK campaigns (Dec 2010 – Jan 2011)

C: User engagement trends by content channel

Selecting a ‘channel’ – a group of websites that relates to a particular topic – for the presentation of teaser ads also plays a part in users’ engagement rates.

Using a sample of five Firefly Video advertisers divided into 16 separate channels or website topic groups, and considering users’ average engagement rates by channel between December 2010 and January 2011, several sector-specific trends emerge (Figure 7):

Games and Internet top the list. The best performing channels are environments where users typically spend leisure time, playing games, reading reviews and blogs and contributing to forums. The high engagement rates here suggest that these leisure users are more receptive to video advertising

Science stands out. Science’s third-ranked position may surprise, but the above average engagement rates here reflect the more staid nature of this online environment, meaning videos make a sharp contrast to page content and capture users’ attention more easily

Advertisers matching the environment succeed. The above average engagement rates of Automotive, Society & Culture, Technology and Travel reflect their placement: a car video in the auto channel is highly likely to generate better engagement rates

Content distracts from video. Lower down the table, in channels such as Business and Shopping, the below average video engagement rates suggests that users are more interested in the web content, and are less focused on the surrounding advertisements

The limited sample size, and the under-representation of some industries using the Firefly Video platform in the UK may skew these results, so more research into engagement rates by channel is required.

Research findings

Key findings: Video engagement rates are much higher when users are engaging with leisure activities

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D. Social sharing

The digital advertising environment, a ‘lean-forward’ medium, generates much higher levels of engagement than traditional media.

Firefly Video can be shared across major social networks, and between December 2010 and April 2011, Facebook was the preferred means of social sharing for the campaigns that included integrated social media links (Figure 8).

It is difficult to draw conclusions behind the phenomena of sharing Firefly Video by industry, as social sharing is as much a response to the quality of a creative as it is to the product or service being advertised. The fact that no single industry stands out as a leader in social sharing of Firefly Video is indicative of the challenges of producing high quality creative video. Advertisers struggle to produce ‘viral video’ – material that gathers popularity via users sharing the ad over the internet – but the fact that engagement video offers social sharing capabilities is a step towards encouraging its dispersion.

Research findings

Key findings: Facebook is the most popular social network for users to share videos. A user’s decision to share a video via social networks is almost entirely determined by the quality of the creative

Figure 8 – Proportion of engagers sharing content socially by advertiser industry(Dec 2010 – Apr 2011)

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Figure 9 – Smartphone manufacturer audience Insights (March 2011)

E. Video audiences

Engagement video helps broaden a brand’s catchment, exposing the product or service to a new audience, or to groups that had little prior knowledge of the brand. An analysis of how users respond to video advertising produces some interesting results, when contrasted with the profile of existing visitors to a product website. This kind of analysis is difficult to run across the total sample of Firefly Video campaigns, as audiences are dynamic.

However, using Tribal Fusion’s Insights, site visitors that engaged with Firefly Video on a Firefly Video campaign for a smartphone manufacturer in March 2011 were compared with site visitors. If, as some marketers assume, visitors to a website are at the later stage of the purchase funnel, then the aim of an online video campaign is to engage with a wider audience, and build brand awareness at the top end of the funnel. The smartphone Firefly Video campaign successfully met this need, as Tribal Fusion Insights data show that site visitors were a much closer fit to standard smartphone audiences, whereas those that engaged in the video come from a broader audience (Figure 9).

Site visitors. Visitors to the site are a close fit to smartphone manufacturer’s typical audience: male, affluent and business focused. Here smartphone and cell phone content indexes are very high, suggesting that those viewing the page are at the ‘intent’ and ‘purchase’ stage of the purchase funnel

Firefly Video Engagers. This is a broader audience, with interest in a wide range of phones – a good fit with the target, an aspiring audience that the smartphone manufacturer is trying to attract. A recent product placement of the manufacturer’s handset explains the highest lift behaviour is ‘reality TV’. Users appear to be at the ‘awareness’ and ‘consideration’ stage of the purchase funnel

Research findings

Key findings: Engagement video is a powerful tool for reaching a broader range of consumers at an earlier stage of the purchase funnel. It helps raise brand awareness, even if it doesn’t lead to an immediate increase in a brand’s website traffic

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Channels – Tribal Fusion network of sites is divided into 16 different channels

Engagement (Firefly Video) – a Firefly Video engagement is either triggered by clicking on the ad or by hovering over the teaser for 3 seconds. Following engagement a full page ad unit expands and serves the full video

Engagement rate – calculated as the percentage of engagements per teaser ads served

Firefly Video – Firefly Video™ is an online video advertising platform served across the global Tribal Fusion network

IAB standard units – 4 core units (300 x 250, 180 x 150, 728 x 90, 160 x 600) and banner (468x60)

Internet Expected Lift – Measure of expected performance of behaviour versus the overall average of the internet

Tribal Fusion Insights – Provides an in-depth view into an online audience and the underlying behaviours that describe it

Glossary

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Tribal Fusion

Tribal Fusion is a global online advertising provider that drives sales for the world’s top brands by helping them learn about, reach and engage their online audiences more effectively.

We combine our global publisher network, advanced online ad technology and integrated audience data on a single platform to help advertisers:

Learn – transform advertising effectiveness by understanding who their online audiences really areReach – increase performance by delivering campaigns to exactly the right audiences at scaleEngage – drive ROI with more relevant, more engaging creative executions

Tribal Fusion was founded in 2001 and is part of the Exponential Group of online businesses – a technology-enabled media services company headquartered in Emeryville, California with operations in 33 locations worldwide.

Firefly Video

Firefly Video is a new, unique and proprietary online video ad format that combines the emotion and impact of TV with the fine-grain targeting, interactivity and measurability of online.

Firefly Video gives advertisers:

Unlimited creativity – combine hi-res video, social apps, games and content in one unit for boundless engagement possibilities

Guaranteed engagement – user-initiated format and CPE pricing means you only pay for your audiences’ active attention

World-class targeting – powered by one of the world’s largest ad networks to target precisely the right audiences, at scale

AboutGlossary

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