In our test, we used fairly basic image ads like this one to establish a baseline ROI for our study: Just to get a good feel for things, we ran image ads that pointed to a landing page on our site and Facebook lead ads. As a result, our effective ROI for lead ads was about the same as our ROI for regular image ads. Slideshow video ads For our next click up in effort and ad quality, we created what we call “slideshow video ads.” Essentially, we found relevant stock photos and used Adobe After Effects to create videos that were far more visually engaging than our static image ads: We tested these ads on the same audience as our image ads and sent them to the same landing page. And, to make things even better, our video leads were higher quality than our image ad leads. As a result, even accounting for the additional time and expense of creating these video ads, our ROI for slideshow ads was 40 percent higher than our ROI for image ads during our testing period (the difference has continued to increase since we finished our test). Unfortunately, due to the increased costs of production, while these short live action commercials did have a 30 percent higher ROI than our image ads, their overall ROI was lower than our slideshow ads during our testing period. However, since our test, the lifetime value of the clients and leads we acquired during our test has continued to increase. However, our long live action commercials continue to drive great results after well over six months of use. So, if you only want to run your video ads for a few months at a time, investing in a cheaper ad is the way to go. Video ads deliver approximately the same ROI at first, but higher-quality ads outperform lower-quality ads in the long run.
These days, everyone seems to be doing video advertising — and for good reason. Video ads are a great way to get people to pay attention to your business and attract new customers. In fact, Outbrain reports that up to 87 percent of online marketers are using video!
However, amid all of this enthusiasm for video advertising, marketers have yet to answer a simple question: What sort of video quality do you need to make video advertising work?
For decades, video advertising has been the nearly exclusive realm of gigantic businesses. Generally speaking, these companies have spent tens of thousands to millions of dollars on each ad. For many businesses looking to get into (or get more out of) video advertising, dropping that kind of money on one ad simply isn’t an option.
Until now, no one has really taken a hard look at how much time and money you need to put into a video to drive profitable results. This is unfortunate, because for most marketers, it’s becoming increasingly important to understand the relationship between the effort you put into a video ad and the performance of that ad.
At Disruptive Advertising, my employer, we’ve spent the last six months trying to define the connection between video ad quality and campaign performance on Facebook. Here is what we found out:
Effort vs. results
In our study, our primary goal was to determine what types of ads would deliver the best return on investment (ROI). To ensure the validity of our results, we simultaneously tested them on the same audiences and sent traffic to the same landing pages.
Since, from a certain point of view (yes, I’m pulling an Obi-Wan Kenobi, but indulge me for a moment), video ads are just image ads with lots of extra bells and whistles, let’s start with image ads. Image ads are — by far — the easiest visual advertising media to create. Give a decent designer a bit of direction, and they can pump out some high-quality image ads in a matter of minutes to hours. Or you can just buy a stock photo image, upload it to Facebook, and you’ve got an ad.
Image ads were the original online ad, and they continue to be a staple of online advertising. In our test, we used fairly basic image ads like this one to establish a baseline ROI for our study:
Just to get a good feel for things, we ran image ads that pointed to a landing page on our site and Facebook lead ads. At first, it looked like lead ads were our hands-down winner. The cost per lead with our lead ads was about one tenth of the cost of our regular image ads. In fact, the leads from our lead ads came in so fast and at such a low price that it almost overwhelmed our sales team.
The only problem was, while lead ads drove tons of cheap leads, those leads were very poor quality. Even after trying to contact each lead over a dozen times, we only ever managed to get hold of about 10 percent of the leads. As a result, our effective ROI for lead ads was about the same as our ROI for regular image ads.
Slideshow video ads
For our next click up in effort and ad quality, we created what we call “slideshow video ads.” Essentially, we found relevant stock photos and used Adobe After Effects to create videos that were far more visually engaging than our static image ads:
We tested these ads…