Video ads drive a 48% higher sales rate than static ads, study says

Brief:

Video ads drive a 48% higher sales rate than static ads, making them an important promotional tool going into the holiday shopping season, according to study results that video advertising company VidMob emailed to Mobile Marketer. The company compared the performance for retail and e-commerce ads on Facebook, Instagram, Facebook Messenger and Facebook Audience Network in the fourth quarter of the past two years to see their effect on holiday shopping.
The length of video ads is a key consideration for marketers, with 10- to 15-second spots having a purchase rate that was 19% higher than average, and 184% greater than the lowest-performing one- to five-second spots and 12% more than videos longer than 16 seconds, VidMob found.
As for video creative, ads that showed text in the first frame or within the first three seconds of running boosted online purchases by 46% more than ads that didn't lead with text. Ads showing the word "shop" as a call to action (CTA) had an average purchase rate that was fives times greater than ads with "get" or "find," according to VidMob. The company studied more 8,000 ads from 429 campaigns for 35 retail and e-commerce brands.

Insight:

This year's pandemic-led surge in e-commerce is likely to carry into the holiday shopping season, with mobile playing a key role in how shoppers research and buy gifts this year. As more shopping takes place online, ad spending across e-commerce platforms is also on the rise, with a recent WARC forecasting an 18.3% global increase for e-commerce ads this year even as overall ad spending drops 8.1%. While digital advertising overall is likely to play a crucial part of the promotional efforts by brands and retailers this holiday season, VidMob's study provides some tips on how to optimize video advertising, including an emphasis on spots that aren't too short and have enough time to tell a brand story.

The study indicates that shorter ads are less convincing in driving online sales, though they still may be useful for awareness campaigns on social media platforms like Facebook. Last year, YouTube introduced a service to automatically create six-second bumper ads as the video-sharing platform sought a balance between ads that were too intrusive and those that were too short. It's important to test the reaction to different kinds of ads to optimize the length, and creative elements like text, graphics and CTA for direct response spots.

E-commerce retail sales surged 32% to $211.5 billion in Q2 from the prior quarter, making up 16% of total retail sales, according to the Census Bureau. It remains to be seen how willing shoppers will be to open their wallets, given that joblessness is at an eight-year high, though many people may shift their spending to gifts instead of paying for holiday-related travel amid concerns about the pandemic. Either way, the holiday period is likely to be heavily promotional on digital platforms as marketers seek to reach online shoppers.

VidMob's study follows other reports about the effects of video ad creative. Most recently, it found that video ads showing "surprised" emotions in the first three seconds led to a 360% jump in performance during the pandemic. Happy emotions saw a 64% decline in conversions, showing how those ads were out of step with the public mood. Calm videos and ones showing outdoor settings also performed well. The holiday season is likely to bring back more traditional, uplifting themes as consumers get into the holiday spirit and are more likely to seek out the comforts of family and friends despite concerns about social distancing.