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Video Advertising: What It Is and How It Works

Berkem Peker
November 28, 2022

The ever-evolving nature of advertising and technology has taken us to a whole new content format, the video ads. Sure, we have had video ads in our lives for more than sixty years, mostly in the form of TV commercials. However, the short-form video ads displayed before or amid videos on YouTube or other online video platforms are pretty new to our lives.

As interesting and engaging as these advertisements are, they are a great way to bring the audience to the business. The only issue here is that even with its great popularity, many people are still unaware of the scope of video ads.

So, we are doing the honors of breaking that bubble for you and taking you to the endless opportunities of video advertising.

The Journey of Video Advertising

Marketers have been using video ads for a long period now. So, here is a brief overview of the evolution of video advertisement through the years.

The first-ever video commercial appeared in 1941 on television, and the duration of the ad was ten seconds. TV commercials gained maximum popularity during the 1950s and the 1960s. That was also the period when brands had control over television programs. Hence, it is known as the golden age of television advertisements; however, it lost its glory over the years.

Instead, TV was gradually replaced by alternative advertisement platforms such as Google-owned video-sharing platform, YouTube. Right now, YouTube streams advertisements in different forms, such as skippable and non-skippable ones.

Advertisements were limited to televisions, radios, classifieds, and computer screens for years. However, video ads eventually reached mobile screens, thanks to iPhones by Apple. Dedicated video streaming applications such as YouTube and Apple’s Safari internet browser made this easier for all.

Fast forward to 2013; video advertising took an unexpected turn with the arrival of social media platforms. Twitter’s video-sharing platform, Vine, was the first to gain popularity; however, it was short-lived.

It was the same time when Facebook came up with the video-sharing option and included advertisements along with it. And if we look into it, Facebook is one medium that remained consistent in advertising throughout these years.

Then came Snapchat, with an option to post video stories for 24 hours. Instagram followed the same trend and became one of the most popular applications for video advertisements in no time.

TikTok was the last to join the club, yet it managed to become a potential space for video advertisements within a short while.

Recently, Storyly enabled video ad stories in mobile apps other than social media giants and made it possible to monetize different apps through Google AdMob and AdManager integrations.

Types of Video Ads

Before we move on to how video ads work, let’s look at their different formats. According to the International Advertising Bureau, there are three types of video ads:

  • Linear Video Ads: We see these advertisements before or after video content on an online platform. These ads do not disturb the continuity of your content by any chance.
  • Non-Linear Video Ads: The advertisements that run concurrently with the video, allowing viewers to see it while viewing the content, are called non-linear video ads.
  • Companion Ads: These are pop-up video ads that do not disturb the streaming of the video. They have texts and images that do not belong to original video content and pop up somewhere on the sides of the screen while streaming.

At least a few of you might have the idea that YouTube is the only platform for video advertisements, but this is not the case. Although YouTube is the pioneer in online video advertising, there are several other platforms now.

If we are to categorize media for video advertisements, it will fall into three categories:

  • OTT platforms
  • Mobile applications
  • Web browsers

The marketer or the brand must choose the medium according to factors such as content and charges. To make the right choice while selecting the medium, you should know how each medium works.


How Does Video Advertising Work?

Different media have different working principles. So to understand how video advertising works, you must know about the popular video streaming platforms. Here are the current popular media channels serving video ads. Take a look at how each medium works:

YouTube

YPP (YouTube Partner Program) allows the content creators to be a part of high revenue earning community on YouTube. However, all the YouTube content creators are not a part of YPP since the platform has set some eligibility criteria. Creators satisfying those conditions automatically become a part of YPP and become eligible for a revenue share.

The basic requirement to become a member of YPP:

  • A minimum of one thousand subscribers
  • 4000 hours of viewed content in the last 12 months.

The list does not end here; however, if you meet both these conditions, you are eligible to be a part of YPP. Once you are a part of it, you will get:

  • Ad revenue: Any YPP member of the age above 18 creating advertisement-friendly content is eligible for that.
  • YouTube Premium revenue: You will get a share of the premium subscription amount of the users who watch your content.
  • Selling channel membership: Any YPP content creator above 18 years with 30,000 subscribers can sell their membership to subscribers.
  • Merchandise shelf: You will be a part of the YouTube merchandise shelf and sell your products on YouTube. Any YPP member above the age of 18 with 10,000 subscribers can sell their merchandise through this shelf.
  • Super chat payments: The super chat payment option allows the fans of a creator to pay them to highlight their message on live chat during live sessions. Any YPP content creator above the age of 18 can use this as a source of revenue.

YouTube is the most outstanding choice for marketers to advertise their products because of the ease of procedures and result assurance. All a marketer has to do is create their own channel, produce a video ad, set their goals, and start the campaign. YouTube will be there to back you on all steps of the campaign.

Facebook

People often say that Facebook advertising has lost its glam and glory, but the truth is that it is still one of the most used media channels for video ads. Another perk of Facebook ads is that Facebook business guides you through all the procedures to make your job easier.

Here is how you can set up a Facebook video ad campaign:

  • Determine your goals.
  • Set your target audience.
  • Set budget.
  • Prepare a video for the campaign.

Once you gather all the information and create your video, you can submit your ad for an ad auction on Facebook. It is where the Facebook algorithm analyzes your goal, target audience, location, and budget and delivers your ad to the right audience.

In simple terms, whenever an advertisement pops up on your screen while scrolling down on Facebook, an auction takes place at the back end. And the ad you get is specifically targeted to you on different levels.

Instagram

Instagram is currently the most popular platform to advertise products to increase brand awareness and reach. As the application is a hub for the young audience, it is a good medium for targeted ads.

Here are the different options for video advertisement on Instagram

  • Instagram application: You can advertise your own posts with the promote option on your business account. However, this is not the right method if you want to generate new leads from the campaign.
  • Facebook ad manager: You can set your ad campaign on Facebook and set Instagram for ad placement. It is one of the easiest and result-assuring ways of ad campaigns on Instagram.
  • Instagram Partners: If things seem complicated to you, you can take the help of a digital marketing team to do the campaign for you. They will create content and do the campaign while you focus on the business.
  • Influencers: There are Instagrammers with thousands to million followers who offer paid partnerships. Being a content creator, their job is to create relevant content for their followers and deliver it pleasingly. So, if the product or service is relevant to their audience, they create and post a video about it. The amount they charge varies according to the number of followers and reachability of the post.

There is a long list of video advertising platforms not mentioned here; however, they all are quite similar in functioning.

Paid partnership with influencers is a result-assuring method of video advertising on all those platforms. All you have to do is to find content creators capable of pulling off a creative video for you and start the campaign.

Video is the king!

It is a known fact that video format has been on the rise for a while, and it claims an irreplaceable place in the advertising world. It can make all the difference given that you know how and where to market it. Now that you know the answer to both these questions, you can develop a more solid strategy for your video ads.

Author Biography:

Ruta Giriunaite is Brand Communication Manager at Billo, responsible for everything visual and written. She is passionate about marketing and trends – from trusted to unique ways of building a brand. In her spare time, she is interested in art, literature, and raising her dog Vincent.

Berkem Peker

Berkem is master of none, jack of all trades. Happens to be a Growth Strategist at Storyly. Knows/writes about growth frameworks and user behavior.

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