Video, done correctly on mobile, marries the creativity and emotion of TV advertising with the flexibility and data-richness of digital ads. But for something so effective, it does seem as though it has taken a while for mobile video to really capture the attention of brands and advertisers.
Whilst the technology to stream and embed video has been around for a while, it’s taken time for the confluence of network speeds, data costs and consumer acceptance to happen. But now that we are here, it’s no surprise that spending on mobile video advertising is about to overtake desktop.
Mobile video works
Investment in mobile video ads is expected to reach $18 billion by 2018, according to a report by media measurement company, Zenith. The same report projects that as mobile video rises, desktop video ad spending will decline by 1.5% to $15 billion. There is a very simple reason for this shift to mobile video; it works. Video ads outstrip banner ads in terms of engagement, bringing much higher ROI to advertisers and of course, more revenue for developers and publishers.
Right now it’s app companies that are benefiting the most from video ads, as they not only help to more effectively promote apps and services they create, but also lead to better monetisation, allowing the majority of apps to remain free.
In the most lucrative segment of apps – namely, gaming – rewarded video ads encourage players by giving them credits or currency in return for their attention. This kind of advertising is particularly popular in countries like China and other Asian countries, where players typically don’t like using in-app purchases.
Brands and advertisers are also getting behind video. The IAB recently revealed that 90% of advertisers, agencies and publishers across 31 markets are using digital video ads, and plan on increasing their investment in the format in the future.
But with so many in the world without 4G or stuck with limited data, there are many challenges that are holding back the wider use of video ads. Those challenges include different OS’s to target, a wide number of ad formats, the cost and use of mobile data and of course the ever-changing screen ratio of smartphones.
In regions such as Southeast Asia, South America and Africa the format is limited by two factors. First, is network connectivity, with millions of users only having access to 2G, or 3G. The second is the number of smartphones used. While smartphone adoption is growing, network speeds and the amount of data available creates challenges.
While there are some techniques to overcome this, such as being able to test network speed and deploy a static ad, rather than a video ad, or pre-loading ads when devices connect to Wi-Fi, the full potential of mobile video has not yet been reached.
As these technical barriers to adoption are overcome, I expect video to play a central role in helping not just apps, but other mobile-first services. And as more video is consumed, more advertisers will look to use it in innovative and engaging ways, perhaps with a blend of augmented reality (AR), for example. The more options there are creatively, the more it will be possible to explore with the format and bring value to advertisers.
One way to ensure the continued success of mobile video is to deliver experiences that users find compelling. This involves telling engrossing stories, and, finding ways to do video in new ways and creating experiences that are unique to mobile.
With the ability to target on mobile, based on profiles of different types of users, mobile video can also deliver contextual experiences, depending on the time of day, location, or demographics of the viewer. Beyond that, advances with AR and real time streaming could also lead to enabling viewers to truly interact with an ad campaign.
Of course, this is just one glimpse of the possible future. In the here and now, mobile video ads may not be able to do everything they can on the desktop – yet – but it’s clear where the industry is heading.