Video syndicator and analytics provider TubeMogul has released a quick study of video abandonment rates caused by pre-roll ads.
The study found that 15.89% of viewers click away from a video rather than sit through a pre-roll ad. For magazines and newspapers the data showed 24.85% of viewers clicking away. For large broadcasters, only 10.9% of viewers click away during an ad.
What did we learn here? Frankly, not much (sorry, Brett!). Back in August of 2008, Tremor Media did a study finding a roughly 80% pre-roll completion rate (or 20% abandonment rate). Brightroll issued similar data, showing an 87% completion rate. The most aggressive data came from Nate Elliott, research director at Jupiter (now Forrester), who suggested audience loss as a direct result of prerolls could be as little as 5% (in Europe). Nate issued a new report on Benchmarks And Best Practices For European Online In-Stream Video Advertising last month. So it doesn’t look like the needle has moved to far in the last two years. I believe thats probably a good thing.
The disparity between newspapers/magazines and broadcasters also seems to make logical sense as well. Users aren’t sure what they are going to get when they launch a video from a website, but can be pretty sure they know what they are in for when visiting a broadcast site.
And never to go without at least a minor quibble, I’m don’t agree with the conclusion about changing how CPMs are counted. I’m sure its more of an oversight rather than an error, but the issue is what counts as a “view,” not what an advertiser will actually pay for that view.
I also don’t agree with the “trade off” that the study alleges that publishers are faced with. They aren’t faced with the choice of running pre-roll vs not, and losing 25% of their audience. The issue is whether or not they can make money from the other 75% or not. No revenue = No business. And while users are not captive to any particular publisher online, new monetization rights platforms will ensure that specific pieces of content will be monetized no matter where the user views it. The ad logic and monetization rules will be set at the content level, with the publisher receiving a set share of that ad revenue for the view.
Additionally, the IAB has been working hard to provide a formal definition of a view and when to count an impression.
My take away is quite the opposite. I think this data shows continued strength for the pre-roll ad format, particularly when the user knows what they are getting as part of the value exchange.