Pre-Roll Ads Dominate Online Video....but View-through Rate is Just 70 Percent, Study

NEW YORK --  Pre-roll ads, especially those for beauty and household products, continue to dominate online video ad inventory in 2009, according to a study from online video ad network YuMe.

The Redwood City, Calif firm analyzed the more than 3 billion video ad impressions it served for in-stream video over the first nine months of 2009 and found pre-roll remains the most popular ad format and comprised anywhere from 81% to 94% of the inventory each quarter.

Usage rose throughout the year and about 93% of spots in the third quarter were of the pre-roll variety.

Also, YuMe found viewers watch about 70% of a pre-roll ad, known as the video completion rate. The view-through rate dipped a bit last quarter to 67%, down from 72% in the second quarter.

"The pre-roll is dominant because ultimately the agencies are repurposing TV creative," said Michael Mathieu, CEO of YuMe. "The challenge for us is to have the agencies spend more time on custom creative because when you do custom creative you get a significantly better experience from an engagement perspective."

In fact, the click-through rate for custom spots is about 2%, such as video takeovers, with pre-rolls generating closer to 1% click-through rates, the study found. YuMe plans to introduce new type of customized ad formats, he said.

The top advertising category for the first nine months of 2009 was beauty products, accounting for 18.6% of the spend, while consumer packaged goods/household ranked second with 14.7% of the spend, and autos third with 10.3% of ad dollars.

YuMe said marketers are most eager to reach people 25 to 54 with 13% of advertisers requesting inventory against that demo. Also popular were the men 18 to 34  and women 25 to 54 audience segments.

Michael will discussing the report later today at the Beet.TV Online Video Roundtable in New York.  The event will be streamed live on this site.

In March in San Francisco, Andy interviewed Michael about pre-roll advertising and industry trends.  We have republished that interview today.

Daisy Whitney, Senior Producer

Disclaimer:  YuMe is the sponsor of today's Beet.TV  event in New York.