Study finds overlay ads are four times more memorable than video ads and drive 72% more savings for advertisers

MAGNA Media Trials, MAGNA’s industry-leading proprietary research offering, announced a new study in partnership with GumGum, the leader in contextual intelligence technology, that dives deep into how brands can stand out on connected TV (CTV).

“Breaking Through: Moving Beyond the Commercial Break on CTV” finds that brands should consider leveraging overlay ads as an additional touchpoint when advertising on CTV. Overlay ads appear within the video content itself opposed to the typical ad experience where the ad is placed during a break in content. Overlay ads capture audience attention, making for memorable ad experiences with a lower fiscal and time investment.

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The study finds that overlay ads are four times more memorable than video ads and drive 72% more savings for advertisers. A key recommendation of the study is that brands should continue innovating to new formats on CTV as concerns about video wear out and increasing ad frequency mount.

“Overlay ads offer an innovative solution for brands concerned about video ad wear-out and attention fatigue,” said Kara Manatt, EVP, Intelligence Solutions, MAGNA. “Overlay ads are more memorable than video ads, they cost less, and take less production time to make.”

The study set out to test overlay ads on CTV to see how they stack up to traditional video ads since overlay ads offer more inventory, don’t disrupt playback and can be delivered in a contextually relevant environment. A key finding of the study is that the nature of overlay ads results in a more fruitful ad experience for those most attentive, and in-market for the product. Among those who recalled the brand and were in-market for the advertised product, over 41% found the ad interesting as well as over 41% felt the ad was context-appropriate.

Additional key findings of the study included:

• Ad frequency fatigue is creeping up on CTV: 65% of people perceived an increase in the number of ads shown per show.
• Higher frequency of CTV ads is especially apparent to younger generations: 71% of those in the 18-24 age range feel ad frequency on CTV isn’t going away any time soon.
• CTV isn’t immune to ad attention challenges: 70% of those in the 18-54 age range report almost always avoiding video ads on CTV.
• Overlay ads help people feel less bombarded by ads and have a lower production cost and time: Overlay ads allow for a perceived lower ad frequency, which people take notice of, and they are also more cost-effective and take less time to produce.
• Overlay ads drive better brand perception: Overlay ads lead to +5% increase in brand favorability, +4% increase in purchase intent and +8% feel the brand is thoughtful.
• Snipe overlay ads formats leads to more persuasion: Snipe overlay ads lead to +35% brand favorability, +22% search intent and +22% purchase intent.

“How we’ve been advertising to people simply just doesn’t work anymore. People have second screens, skip buttons, and are just conditioned to avoiding ads when possible,” said Phil Schraeder, CEO, GumGum. “Creating new ad formats, like an overlay ad, gives advertisers the opportunity to connect with people where they are at and in a way that doesn’t disrupt what they are there to do – enhancing the overall experience for them and boosting brand recall and favorability for advertisers.”

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The study methodology included recruiting CTV viewers to watch a streaming TV show of their choice, followed by a final survey to measure the impact on traditional branding metrics and obtain feedback on ad frequency. Formats tested were video ads and overlay ads, specifically overlay ad – corner, overlay ad – snipe static, and overlay ad – snipe video.