Why Video is Set to Dominate Mobile Advertising
By: Maor Sadra (VP Advertiser Relations)
My guest blog posts usually start with a catchy title: a pun or some sarcasm. I chose this generic one (as oppose to “Video Killed the Banner” or something cheesy like that) as I feel strongly about Video advertising and wanted to get that across in the title. Those that met me and discussed growth strategy can testify to that.
All of these articles are great and help create the buzz around mobile video advertising – but none of these answered the question: “Why is mobile video advertising going to be so big??”.
I wanted to try and answer this, in my own words.
The IAB 2012 Full Year Revenue Report shows that video represents only 6% of the digital advertising pie. That’s pretty much “nothing” in terms of a “market”. Yet, there are more and more companies launching a “video only” product every day as well as companies going public with a pure video offering.
Video advertising, similar to mobile advertising, is a relatively new vertical, which shares some of the growth challenges mobile advertising has, while experiencing a few unique ones (compression, serving costs…) , but the biggest challenge is the actual delivery of the message.
Video supposedly solved the barrier to entry for a few major brands – “just play your 30 seconds TV ad on any digitally connected device”. But then came a recent study that showed that users abandon the videos on YouTube if the video takes more than 2 seconds to start(!), and every 1 second delay further increases the abandonment rate dramatically.
2 seconds attention span?! That’s all we have? really?! Oh! Here’s a shiny penny! What was I saying?
Brands found that they need to create shorter, “straight to the point” videos, capturing users’ attention from all those shiny pennies laying around.
Video advertising in mobile slightly helps with this problem.
How, you ask?
While a pre-roll ad on YouTube plays on top of the video within the YouTube website (a site filled with distraction such as – other videos, users comments, banners and so on…) – Mobile Video ads takes the entire screen by default. It’s like telling a brand marketer: “Hey – you’ve got this users undivided attention for the next 2 seconds at least…”. Brands leveraging the video format look for users through screens. Whether if that screen is 4 inch or 55 inch is slightly less relevant from what I’ve discovered…
One of the biggest challenges in mobile display advertising is the fact that there’s a LOT more supply than demand. Mobile video advertising doesn’t work the same as display, since you can’t (or at least – shouldn’t) present a user with an ad on every page view, there’s some form of frequency capping on the format itself. This substantially decreases the potential ad inventory available for video ads, making the available impressions more competitive in price while retaining a good balance between supply and demand.
The other thing I like about mobile video advertising is that it comes with some “real standards”. In my last blog (The Wild Mobile Monetization West) I wrote about how mobile advertising is suffering from lack of standards, given that it’s a “land grabbing” industry and every company wants to put their mark.
Video advertising was born in the online, computer based advertising world which rather quickly was standardized through the IAB with VAST and later VAST 2.0 and VPAID standards, making the technology barriers possible for anyone to bridge.
And last but not least , I can’t write a post about Mobile video advertising without mentioning a word about the CPMs. There’s nothing as great as the CPMs of video advertising. When compared to the likes of the mobile banner or even full screen interstitial – Video wins EVERY TIME.
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