Sunday, June 20, 2010

Facebook Video Ads Win Over Gamers with Virtual Currency


fb_ad_jun10.jpgWith a population approaching half of a billion users, if Facebook was its own nation it would be the third largest in the world behind China and India. With that in mind, it's no surprise that secondary activities on Facebook - like viewing videos - can still produce high rankings for the site that compete with the likes of Hulu and YouTube. One of the ways users on Facebook view video is through advertisements, and a recent study by TubeMogul revealed some interesting stats on which ones worked, and why.

TubeMogul studied the various forms of video advertising displayed throughout Facebook, including in-banner video, interstitial and virtual currency ads. Virtual currency ads are served to gamers who receive points or virtual money within a game in return for completing them, and they turned out to be one of the best methods of attracting traffic.

You Scratch My Back, I'll Scratch Yours

According to the study, around 43% of virtual currency ad viewers completed the entire ad, and roughly 52% watched at least three quarters of the ad. These numbers just barely inch out those of in-banner and interstitial ads, but where the virtual currency ads excel is in click-through and share rate. By rewarding viewers for completing ads, advertisers see a click-through rate double that of in-banner ads and over 5 times that of interstitial ads. Users share these ads on Facebook and Twitter roughly 50% more than in-banner ads and around 6 times more than interstitial ads.

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Additionally, virtual currency ads are watched 6 seconds longer than in-banner ads on average, and nearly 5 times longer than interstitial ads. The most intriguing statistic from the study, especially for advertisers, is the price of these ads compared to how long they are watched. The study found that virtual currency ads average $0.22 per minute viewed, nearly identical to the $0.23 cost for interstitial ads. In-banner ads, on the other hand, averaged $6.27 per minute viewed.

How Facebook Ads Stack Up Against Web Benchmarks

But how do these Facebook ads compare to ads placed outside of the site. TubeMogul used an off site benchmark to gauge the advantage or disadvantage of using Facebook for video ads. The study found that Facebook users are nearly twice as likely to finish watching ads than they would outside of the site, but click-throughs for the benchmark ads were higher than in-banner and interstitial Facebook ads. Virtual currency and in-banner ads are watched between 9 and 15 seconds longer than offsite ads, but the offsite ads tend to be better value to advertisers than many Facebook-based ads.

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Targeting Ads at User Behaviors

User behavior seems to play a large role in determining which Facebook video ads work the best. By rewarding game players with virtual currency, advertisers see higher click-throughs, longer watch times and higher value from their ads. Interstitial ads, which pop up as users navigate through games and apps, garner just a fraction of the view time and click-through rate despite being cheaper to implement.

Interstitial ads seem obtrusive to users since they only appear at the exact moment a user has clicked to navigate from one screen to another, so it makes sense that users close them quickly in frustration. By offering Facebook users with rewards for watching videos at their own discretion, advertisers attain much higher view times and click-throughs.