Has Pre-Roll Video Advertising Met the Grim Reaper?

This contributed article is written by Jaffer Ali, CEO of Video Snack Network. He lays out the facts regarding video pre-roll advertising and why it's a bust.

Illusions commend themselves to us because they save us pain and allow us to enjoy pleasure instead. We must therefore accept it without complaint when they sometimes collide with a bit of reality against which they are dashed to pieces. --Sigmund Freud

This article is likely to irritate a lot of people. Of course that is not the goal, but an expected byproduct nonetheless. Let me first begin by stating in absolute terms that I wish I were wrong about what follows, because my life would have been rendered easier.

Here is the conclusion and the rationale will follow:

Pre-roll video is a terrible DR and branding vehicle!

Before the proof, a simple question. Have you ever watched video online? Of course you have. Now, do you like auto-played commercials that precede the content you click on? I asked 23 people and not one answered affirmatively. Hardly scientific, but anecdotally interesting.

This is where the problem begins. Nobody wants more advertising. At best it is tolerated. But in ever-increasing numbers we are avoiding video commercials on both TV and the Internet. We use DVRs to zip through them on television, and simply click away from them on the computer.

With pre-roll, the abandon rate is the online metric that tells us how often people click away before the content clip plays. Three years ago, a :30 pre-roll garnered a 26% abandon rate. Logic dictated that a shorter pre-roll spot would lessen the abandon rate, so :15 pre-roll spots became the de rigueur option. These shorter pre-roll interruptions suffered "only" an 8% abandon rate.

But that was then, and this is now. Today, the abandon rate of the :15 pre-roll has more than tripled. The trend is clear. More and more people are avoiding the ads. But for the approximately 75% that are sticking around to view the post-roll content, how effective is that fifteen second spot?

There are two ways to measure the effectiveness of an online ad. One is the click and the other is the sale. For branding campaigns, the click is proof that the audience has engaged the brand message, regardless of the audience. But the sale is all that matters to a DR campaign.

How effective is a :15 pre-roll spot in generating a click? Answer: not very. Click thru rates for pre-roll video ads have declined to less than 1% (which coincides with the precipitous decline in CTRs for their online display-ad counterparts), with the result that the CTR metric is being abandoned because no one, seller or buyer, can afford that level of failure. Rather than solve the problem, the industry would rather shoot the messenger.

Can a fifteen second spot be used for DR purposes? I have a lot of personal experience in TV direct response, including campaigns for Riverdance, Lord of the Dance, Honeymooners Lost Episodes and Muhammad Ali to name just a few. We've used :15 pre-rolls in more than fifty online DR campaigns. The results? Utter futility. So futile that if anyone tells me that it can be used for such purposes, I will call them a liar, a fool, or both.

To treat your facts with imagination is one thing, but to

imagine your facts is another. --John Burroughs

So who is touting the pre-roll as a great advertising medium? Trade publications certainly are. Why? Because the same parties utilizing pre-roll are subsidizing the trades. The "conspiracy" is obvious. Those with an economic interest are loath to see any reality that conflicts with their purpose.

Perhaps you're questioning my company's own self-interest in abandoning the pre-roll as a savior. Let me assure you that as owners and operators of both a video portal and a direct-response division, we would like nothing better than a pre-roll application that we could champion. But the facts about pre-roll conspired against us; our objective assessments of pre-roll from a molecular level compelled us to develop a different business model. Simply put, this pre-roll dog won't hunt. In fact, the only way it works is in comparison to its even more anemic display-ad counterpart.

The weirdest part of the pre-roll saga is how the intermediaries have been able to convince brands that this was the road to effective, scalable reach. Two things are for certain: these clever intermediaries obviously didn't use their own money, and certainly didn't use pre-roll to make their point.

Jaffer Ali is CEO of the Vidsense Video Snack Network, an online network for brand advertisers. He also owns and operates EVTV1, a video portal, and PulseTV, an e-commerce catalog.

Of course, not everyone buys this line of thinking.