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Video Advertising

What Is Video Advertising?

Video advertising is a media channel used by advertisers to inform, educate, and connect with customers and potential customers via video content.

In order to simplify the ecosystem of digital video advertising, the Digital Video Committee of the Interactive Advertising Bureau (IAB) has created two categories of video ads: in-stream video ads and display (or out-stream) video ads.

In-stream video ads

Digital video in-stream ads are served into—and executed within—a player, according to the IAB. The audience is shown an ad in the context of streaming content in an environment where they were expecting video or in-app streaming content.

The IAB further defines digital video in-stream ads as linear or non-linear ad formats served into a video player before, during, and after a variety of content including, but not limited to, streaming video, animation, gaming, and music video content in a player environment. This definition includes digital video ads that appear in live, archived, and downloadable streaming content.

In summary, there are three types of in-stream video ads:

  • Linear video ads
  • Non-linear video ads
  • Companion ads

Linear video ads

Linear video ads interrupt streaming video content much like a TV commercial. They can play before (pre-roll), during (mid-roll), or after (post-roll) the streaming content. Linear video ad formats are occasionally accompanied by a companion ad, or they can include an interactive component.

Non-linear video ads

Non-linear video ads are typically served as images that “overlay” the video content. The ad runs concurrently with the streaming content so the user sees the ad while also viewing the content without interruption. (Ideally, the nonlinear video ad is small enough to allow a relatively unobstructed view of the content.) Nonlinear video ads are delivered as text, static images, interactive rich media, or as video overlays. As with linear ads, nonlinear ads are sometimes served with companion ads.

Companion ads

Companion ads are served along with linear or nonlinear ads in the form of text, static-image display ads, rich media, or skins that wrap around the video experience. These ads come in a number of sizes and shapes and typically run alongside, or surrounding, the video player. The primary purpose of the companion ad is to offer sustained visibility of the sponsor throughout the streaming video experience. Digital video companion ads are always served with a master ad, which is either the linear or nonlinear ad.

Display (or out-stream) video ads

Display video ads play outside of video content—between paragraphs of text, for example—and there are several sub-categories:

  • In-banner video
  • In-page video
  • Rich media (banner with video)
  • Video interstitial
  • Incentivized video
  • In-feed video

In-banner video

In-banner video ads are display (i.e., banner) ads that incorporate a video as part of the overall creative. These types of ads do not rely solely on video to communicate an advertiser’s message according to the online site Flite but include video as an important, usually central, feature to the ad.

In-page video

In-page video ads are delivered most often as a stand alone video ad and do not generally have other content associated with them, according to the IAB. This format is typically homepage- or channel-based.

Rich media (banner with video)

Rich media is a digital advertising term for an ad that includes advanced features like video, audio, or other elements that encourage viewers to interact and engage with the content, according to Google.

Using HTML5 or Flash technology, rich media display ads can include multiple levels of content in one placement: videos, games, interactivity, even tweets from an ad, all without requiring the user to navigate away from the page where the rich media ad appears (though there is often an option to click-through to the sponsor’s website).

Rich media video ads also provide aggregated metrics on audience behavior, including video completions.

Video interstitial

According to the Mobile Marketing Association (MMA), a video interstitial is an advertising video clip that is inserted into the middle of a complete Multimedia Messaging Service (MMS) message.

Incentivized video

Incentivized video ads are placed in-app by developers as a way to generate revenue and create app awareness, according to Media Post. They work by requiring users to watch a video ad on their devices in order to move to the next level of an in-app game, or to receive reward points or virtual goods.

In-feed video

In-feed video ads appear in the middle of the stream as you scroll through a website. The IAB has established three main types of feeds:

  • Content Feed
    • Ads appear in editorial sites, feed readers, and other content-focused apps
  • Social Feed
    • Ads appear in social networks
  • Product Feed
    • Ads appear in sites and apps that display product, service, or app listings



According to the IAB, online video advertising revenue is expected to reach $15.4 billion in spend by 2019—the fastest growth in wired Internet advertising. According to Hub Spot, 78 percent of people watch videos online each week and 55 percent of people watch videos every day. And Invesp posted research showing that, by 2017, 74 percent of all Internet traffic will be video-based.

Video advertising also provides advertisers with a range of formats (e.g., from in-stream to display video) from which to choose.


Because viewers often have the option to skip over online ads, you will want to make sure that yours will be something worth watching, according to the Cox Media Group. In a survey from Adroit Digital, 24 percent of respondents reported that the “actual content of the video was a huge factor in deciding whether they would skip or not,” with the same number reporting they would be less likely to skip an ad with meaningful content. The bottom line: producing a video worth watching can possibly incur hefty creative and production costs.

There is also the current issue of “viewability.” According to Google, an ad served does not necessarily equal an ad viewed and digital advertisers and publishers are catching onto this as the industry shifts toward valuing “viewable” rather than served impressions.


Return on investment for video advertising is in its nascent stages. A report by Strata Marketing revealed that 40 percent of US ad agency professionals polled were unsure whether their ads were receiving positive ROI from digital video.

An online article published in Ad Age states that there are six categories to consider when calculating the ROI of video advertising:

  • Mindshare
    • In most cases, mindshare is manually measured by surveys or by fastidiously analyzing the tone of a sample of press and social posts
  • Revenue
    • Did your content investment deliver positive impact on your P&L?
  • Brand lift
    • Did your video effect a positive change in consumer-decision signals like purchase intent, preference and “likeability?”
  • Engagement
    • Engagement metrics include retention rates, shares, comments and likes
  • Reach
    • How many people theoretically saw your video? In video terms, this is popularly quantified as video views or how many times your content is “delivered.”
  • Viewability
    • Was the video played in-view and above the fold, and did people actually see it?


When creating a video ad, a positive user experience is paramount. To that end, Entrepreneur posted a set of best practices for video ads that include:

  • Define your audience before creating a video
  • Get to the point quickly
  • Keep it shot and simple
  • Use “remarketing” lists to identify your audience
  • Test YouTube and display ad placements on Google AdWords
  • Enlist voice-over talent
  • Test different components of your video
  • Test several audiences in AdWords


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