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Contextual Content: Using Video Overlay Ads to Improve User Experience


Selecting the right ad serving solution is critical for any media company using an advertising-based model for their mobile app. The goal of maximizing ad revenue must be carefully balanced with providing the best user experience possible. If your users suffer from ad fatigue because your video ads are intrusive and affect the experience, user retention will be poor.


Video overlay ads, sometimes referred to as concurrent content or in-program ads, are a viable alternative to some of the more intrusive options, such as mid-roll ads. Below, we will highlight the benefits of using video overlay as an alternative to other ad formats.


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What Are Video Overlay Ads?

Overlay ads display while videos play, typically at the bottom of the screen, without interrupting the content being watched. Traditionally, they’ve been static banner ads that show at the bottom of videos (think the ads you see on Youtube). But overlay ads have become much more complex, incorporating high-quality design, animation, and even interactivity. They can also be presented differently than traditional advertisements, for example as contextual suggestions, sponsored content, and interactive in-program features. 


Benefits of Using Overlay Ads

Better User Experience

For decades, television employed an advertising model that was interruptive to the viewing experience. With the introduction of set-top boxes, OTT services, and media applications, there are opportunities to do much more, and yet we still see this model pervade the content landscape. Pre- and mid-roll ads, for example, are essentially the same concept as traditional broadcast ads.


Video overlay allows you to display ads without interrupting the program or content being watched, which is significantly less invasive to users. Of course, the misuse/overuse of overlay ads can negatively impact the user experience, but implemented correctly, they provide a better user experience than many of the alternative ad serving methods.

Contextual Targeting

Contextual content, while relatively nascent, is an effective method companies are exploring in their video advertising strategies. Using context to determine the ad content that is served isn’t a new concept, but video advertising has lagged behind until recently, namely because the technologies that allow it weren’t yet perfected. But that’s changed.


Now, there is the ability to serve ads that take the video content being watched into account. With video overlay in particular, advertisements can be shown that are directly relevant to particular scenes, products shown within the frame, and more. As Watchwith puts it, these capabilities allow advertisers to tell brand stories within the context of programs. This is beneficial for both advertisers and publishers; the former get more effective audience targeting, and the latter better monetization opportunities by offering advertisers more powerful advertising options.


Overlays also allows advertisers to provide a much more engaging, interactive experience. Some of the formats being experimented with include polls, quizzes, tweets, backstories, special offers and more. Sponsored content is also a possibility, with a variety of different overlay content being served throughout a program, all sponsored by a single brand.


These interactive, contextual overlays are also showing promise, with recent research by Magid showing they have higher levels of unaided ad recall and improved brand metrics versus traditional ads.


Ultimately, the creative use of video overlay ads can provide a less intrusive experience for your users; more powerful advertising options for your advertisers; and the ability to find new ways to monetize your application. When implemented correctly, the use of contextual targeting and interactivity seamlessly fit into the experience, providing a viable alternative to other ad formats.

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Dan Kosir

Director of Marketing