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Video ads are worth the expense

News, 08 February 2016

NEW YORK: Although video ads can be pricey, not just because of production costs but also to make them playable on a publisher's site, they still generate clicks at 17 times the rate of banner ads, according to a recent study.

Digital benchmarking firm L2 analysed the video campaigns of 83 luxury brands for its Digital IQ Index: Fashion 2015 report and stated that many will have to rethink their strategies as video is set to account for half of all internet traffic by 2019.

L2 examined brands' video content, share of organic views and the rate at which videos converted to sales compared to other forms of content.

Brand-building videos emerged as the most viewed and most popular in terms of likes and comments compared with videos that had a greater focus on commercial content.

While finding a direct link between sales and social media campaigns can be difficult to evaluate, the report established that interaction rates on video posts are 60% higher on Facebook than posts without video while those on Instagram are 20% higher.

However, with the share of video posts on Facebook growing to only 8% since 2013 – and 6% on Instagram – the report advised brands to consider increasing their proportion of posts containing video, even if video ads can be more expensive.

"Videos are so much more engaging to a shopper than a static ad. They attract, invite and inspire further consideration. As such they come at a higher price tag," said Elizabeth Elder, research associate at L2.

"However, the investment is worth the effort. Studies have shown that the click-through-rate of a video ad is 17 times higher than a static ad."

Furthermore, with more than 80% of users accessing social platforms on mobile devices, mobile marketing will become increasingly important for brands that wish to remain competitive, L2 said.

"We expect [the mobile ad] market to explode," Elder continued. "Currently, brands are underutilizing it and video is such a dominant medium.

"Attractive, visual ads will definitely have an impact on a mobile shopper trying to figure out if she even likes the brand and if further consideration is even worth it."

Data sourced from L2; additional content by Warc staff