What are the ideal KPIs to set when placing video ads?

Following the first part, we spoke with Yoichi Tanaka, Representative of Teads Japan, and Ryota Murayama of Dentsu Digital Inc. Business Bureau about utilizing video advertising. In this second part, we explore the types of video ads, approaches to KPIs, and the benefits video advertising delivers through campaign examples.

The advantage of video ads is their ability to appeal through both visuals and sound. However...

──When showing videos on smartphones, the issue of sound seems likely to arise.

Tanaka: Overseas, whether in Europe, America, or Hong Kong, people use their phones for calls on trains, in restaurants... all sorts of places. So they're more tolerant about sound. Teads' international format includes testing a specification where the first 5 seconds of a 15-second video ad play with sound automatically. But this doesn't fit Japanese culture. So in Japan, we set the default to OFF, with sound playing only when the user has headphones on or presses the sound button.

Murayama: Video ads that play within video content, like on YouTube, are called "in-stream ads." Since these in-stream ads play when users are watching videos, they can deliver both video and audio to the user. Other out-stream ads, however, do not play sound until the user takes action on the video. The lack of audio is a significant drawback. To counter this, efforts are intensifying to compensate for auditory information with visual information via subtitles, similar to features recently released by Facebook.

However, in-stream ads also have disadvantages. While appealing to both sight and sound is a major advantage, the intense stimulation can easily cause user stress. While the absence of audio doesn't eliminate stress entirely, it does help reduce it. For new formats like in-read ads, where video ads suddenly appear in previously ad-free spaces, it will be necessary to repeatedly test through trial and error to verify both the positive and negative effects.

Capturing Viewers' Interest with a "Collapsible" Video Player

──Since we're discussing formats, could you tell us about them?

Murayama: Dentsu Inc. PMP's "Premium Video Series" currently offers five ad formats: Top Rich (top-of-page rich media), Billboard Video (top-of-page large format), In-Read (mid-article placement), Auto-Play (auto-playing video ads), and In-Stream (video ads within video content).

Top Rich and In-Read have similar formats, but Top Rich features a larger video positioned at the very top of the page. In-Read appears within or below articles. Billboard is a horizontal banner with an embedded video player, designed to replicate the format seen on YouTube's homepage for use on other sites.

Tanaka: Regarding Top Rich and In-Read, which are also our company's formats, a key feature is the use of a collapsible video player. Compared to a player that is simply embedded, requiring the user to open the player adds an action that captures their interest and attention. This has been proven through A/B testing.

KPIs should not be singular; they should be set according to each campaign objective.

──When placing video ads through Dentsu Inc. PMP, how should KPIs be set?

Murayama: If the goal is awareness, like with TV commercials, using the same target settings as traditional "harvesting" web ads won't effectively drive promotion. Among foreign advertisers, it's becoming common to set separate KPIs for conversions and for awareness. This shows that in web advertising, KPIs shouldn't be singular; they should be set according to the specific campaign objective.

Going forward, we'll need evaluation criteria that assign value to the mere act of viewing an ad, such as establishing schemes to measure how much it contributed to awareness or how much it led to purchases.

For awareness surveys, we engage research firms. These firms conduct panel surveys targeting hundreds of thousands of users in their databases. We also utilize tool-based surveys. For example, even if a user who viewed a video didn't click immediately, we can track whether it later led to a purchase.

Dentsu Inc. PMP offers both paid surveys using research firms and free survey packages. We can provide survey solutions tailored to your objectives and budget.

New Balance Japan's Campaign That Delivered Results Far Beyond Banner Ads

──Please tell us about a case study using video ads.

Tanaka: Let's discuss the case of the sports shoe brand "New Balance." We ran a smartphone campaign for New Balance Japan, where smartphones account for approximately 60% to 70% of site traffic. The target audience was women in their 20s to 40s. We placed 15-second out-stream video ads containing New Balance's message on about six specified media sites, including those featuring content for women.

We then measured the numbers between those who watched for 15 seconds (our service's billing point) and those who watched until the end. Among those who watched for 15 seconds, 13.9% ended up watching until the end. While there may be debate about whether this number is high or low, considering that a banner click rate of 0.1% is considered good, this is a meaningful figure.

Furthermore, when we later conducted an email survey of those who watched the video for 15 seconds or longer, the overall awareness rate was approximately 30%. Since other in-stream video platforms reportedly achieve rates in the 5% range, it seems that placing video ads where they aren't typically found captures user attention and makes the ads more memorable. This is still a hypothesis, however, as there aren't many case studies yet.

We want to establish a video ad market that contributes to branding!

──Finally, could you share your outlook on the future of video advertising and Dentsu Inc. PMP's plans?

Murayama: Video advertising will only grow in importance, so we believe it's crucial to firmly build this market centered around Dentsu Inc. PMP. We hope to develop this market sustainably by collaborating with publishers, Google, Teads, and other agencies. In doing so, it will be important to consider how to deliver benefits back to advertisers and build the environment they seek. We also aim to shape the market while considering the benefits for publishers.

Regarding video formats, the key will be finding the optimal form based on two axes: how much recognition it achieves with users and how much stress it imposes on them. It's about managing and caring for user stress. We will continue to challenge ourselves, not just accumulating case studies but also conducting proof-of-concept experiments.

Tanaka: When watching TV passively, you see commercials even if they don't interest you. Whether alone or with family, I think people view commercials as part of the content. But viewing articles on a PC or smartphone is active. The stress of encountering an uninteresting ad there is something unique to the digital world, not present in TV.

I'd like Dentsu Inc. to strongly advocate for a format addressing this, something like a "non-stress video format." Achieving that would be highly effective. If chase-style video ads proliferate, users will likely skip most of them. I want Dentsu Inc. to create a market for video ads that are closer to content and more accepted by users.

Murayama: User stress will become a major challenge for video ads. While we can't eliminate stress entirely, we must strive to minimize it. We'll need to explore effective formats and delivery methods through repeated trial and error. If anyone has methodologies that significantly reduce stress, I'd absolutely love to hear about them (laughs).