Can Pre-Roll Ads Effectively Augment Your TV Buy?

When it comes to viewing video content, there is a significant change in the tide. What started as a ripple is now a big wave and it's heading directly for your ad budget. If it hasn't already, this shifting tide could change everything you've been thinking about for your TV advertising strategy.

That rolling wave set to crash down on your TV ad budget is coming in the form of online pre-roll video. Defined as auto-played ads on user-selected content with a length usually no longer than 30 seconds, pre-roll digital ads are set to have a major impact on the way brands communicate and engage with audiences. No doubt you've seen them and may have even created a few for your brand. And if not, you're likely to be doing so very soon! According to eMarketer, U.S. spending on digital video ads will nearly double in only four years, climbing from $4.14 billion this year to $8.04 billion in 2016. No doubt, the trend is true for Canadian marketers. Indeed, this is a rising tide!

But what about the TV ad? Is it washed up? For the past few years, we've all heard the constant barrage of supposed pundits telling us that TV is in decline. The fact is it isn't. Sure, viewing habits have changed along with changes in technology - binge viewing, time shifting, live streaming, DVR, tablets, Netflix, iTunes, YouTube, smartphones - all of these have had a significant impact on traditional TV consumption. But that's the difference. The idea of traditional viewing on a television set is now more accurately replaced by the broader term "video viewing" - content that can be seen on all kinds of different screens and is more viewed than ever. Our data at Ipsos would suggest that the changes in TV viewing have not really had a measureable impact on the breakthrough of TV advertising. But the fact remains that TV advertising still accounts for a majority of a brand's major paid advertising. In fact, Nielsen research shows that TV advertising in 2013 still accounts for 65% of all advertising spending.

But this upcoming shift in spending begs a question that is probably on the mind of almost every marketer today: should you be using pre-roll video to augment your TV campaigns?

Sizing up the Situation

Luckily, we have some insight into this problem. Leveraging the power of digital technology, Ipsos has put in place methods to track exposure of digital ads on consumers' computers.

Ipsos has arrangements with a number of websites across Canada, which account for 80% of Internet traffic. This allows us to place cookies on consumers' computers when they view one of our clients' ads. Then, through the magic of our online sampling tools, we are able to identify those exposed to the specific ad to determine if they recall seeing the ad, whether they correctly recall the brand, and whether their opinions towards the brand or product have shifted as a result of the exposure.

To help answer the question on the use of pre-roll to augment TV, our advertising research experts at Ipsos recently put our technology to the test with a study to help one of our clients to isolate the contribution of pre-roll versus TV. By working with our client and their media agency, we were able to measure the impact of shifting GRPs away from TV towards pre-roll. The test involved the selection of two very similar TV markets in Canada and running the same video ad differently in each market. In one market, the media agency ran the ad on TV only (at 1,170 GRPs), while in the other market we ran the ad on TV (with the same GRP weight) as well as targeted with additional 1.5 million pre-roll impressions.

Five Lessons Learned

What did we learn, you ask? In essence, we uncovered five key things:

1. Using online pre-roll paired with traditional TV appears to have driven incremental reach.
2. The reach of the ad in pre-roll was less efficient, but branding was better. The rate of recall amongst those who are frequent online TV viewers is lower; however, they are better able to link the ad to the brand.
3. The pre-roll media attracted a slightly different audience versus traditional TV. Generally they were younger and did not tend to watch as much traditional TV.
4. Persuasion and brand messaging scores for our client's brand tended to be stronger among those who watch online TV frequently and recalled seeing the ads, suggesting that the digital impressions helped the ad efficiency overall.
5. Perhaps somewhat not surprisingly, the combination of pre-roll and TV in the test city resulted in higher wear-out scores than the control city where the ad was only run on TV, most likely driven by the additional support behind the ad rather than the medium itself.

Implications and Strategy

So, what are the implications and how does it impact your strategy? From a research perspective, we are clearly going to have to address pre-roll video as a regular component of ad tracking methodologies. Leveraging technology, such as placing cookies to track exposure of pre-roll, adds value to our analysis and will improve the success of future measurement initiatives.

But more importantly, marketing strategy and media targeting should be carefully considered when evaluating how to execute a pre-roll digital buy. The evidence from this test suggests that digital impressions have a positive impact, but they don't drive sufficient recall on their own to outweigh the importance of ensuring TV remains part of the media mix. At this time, it appears as though online may not be a simple replacement of television media - but rather additive to help in garnering incremental reach among harder to reach consumers.