Pre-roll ads, commercials that play before the viewer’s chosen video, have become fairly standard on the web. This is despite the cost and viewer drop-off rates: CPM for preroll ads can be 5 times that of a rich media banner ad; 30-second pre-rolls cause 15% of viewers to stop watching.
Many advertisers are adding “choice” to preroll to increase viewer engagement. Adding choices has proven to improve effectiveness — double the click-through rate, and almost three times the recall.
A 2010 BrightRoll study of media buyers reported that 94% of respondents will spend more in online video advertising in 2010 than in 2009. 54% of respondents expected to spend their creative budget on interactive prerolls, 20% on branded entertainment (not including video), and 15% on consumer content or webisodes. The biggest concern marketers had about preroll advertising was the quality of the content (61%), followed by specialized targeting (14%) and click-through rates (11%).
There are a number of companies trying to alleviate these concerns. SpotXchange, BrightRoll, and other video ad networks are now offering real time bidding, which enables advertisers to improve performance without individually tracking publishers. Google recently announced AdWords for video, which unifies its advertising interfaces and improves reporting for YouTube video ads.