Mobile Marketing

Mobile Video Dominates Advertising Spend Globally

Watching, sharing and creating video content is consuming Australia’s consumers. According to Google, 72% of Australian Smartphone owners now watch video on their device and Frost & Sullivan found that nearly ¼ of Australian consumers are watching TV shows and movies on a tablet or smartphone.  Young people in the US are already spending almost 6 hours per month watching video on a smartphone according to Nielsen’s The New Digital Consumer report. In Australia we are also seeing remarkable growth in mobile video usage. The Australian figures are a little lower at just over 2 hours, but trends suggest we are catching up.

While broadcast TV is still the dominant medium for watching video content, streaming and catch up TV services mean that even broadcast content is making its way to other devices. Consumers are demanding flexibility and choices that suit their unique viewing needs, with the younger generation selecting whichever screen is most convenient, allowing them to view content on demand.

.. it is the fusion of video advertising with mobile that has been transformational

Naturally the market for mobile video advertising is keeping up, if not exceeding the demand for mobile video content. One of the compelling factors for advertisers is the ability to use video in cross-platform campaigns for both online and mobile. According to the IAB Online Advertising Expenditure Report, video advertising in Australia grew 76% to reach $196 million during the 2014 financial year, and mobile advertising also grew strongly to reach $620m. In fact mobile advertising has more than doubled its contribution to the General Display advertising market, lifting mobile above the total magazine market.  In fact in the U.S., mobile is forecast to account for nearly 10% of all media ad spending in 2015. In other words, it will have taken over magazines, newspapers and radio for the first time, to become the third-largest individual advertising venue.  Australia’s Alice Manners, CEO of IAB Australia believes it is the fusion of video advertising with mobile that has been transformational for advertisers and publishers in recent times. “Mobile inventory has been somewhat undervalued, but the cross platform opportunity that video advertising brings to it has unlocked considerable value and potential for both sectors.”

Marketing firm ‘Unruly’ identified an average CTR for video campaigns that was almost 3 times higher on smartphone and tablet devices than laptop or desktop PCs.

There is significant benefit to digital advertisers who choose to extend their video ad campaigns to the mobile channel. A 2013 Millward Brown study in China showed how shifting 40% of a TV budget to other screens yielded an increase in reach of 20% at a reduced investment of 30%.  Although smartphones and tablets account for just over 10% of online video consumption, reports are flooding in about the significant performance upside of mobile video ads.  An October 2013 report from Social Media Marketing firm ‘Unruly’ identified an average CTR for their video campaigns that was almost 3 times higher on smartphone and tablet devices than laptop or desktop PCs.   What they found was that click through rates had increased significantly over the previous 12 months, up 265% to a CTR of 13.6% on mobile video campaigns. This is almost three times the click through rate that Unruly are seeing on desktop video campaigns of 5.4%. Interaction rates have also more than doubled to 22.6% on mobile video campaigns.

These results are echoed by Celtra who recently reported their Mobile Video Ad Engagement Rates for Q1 of 2014.  They found that smartphone video play rates on standard ads were 11% and completion rates were 46%. Both play and completion rates were higher on tablet devices (13% and 63%). Ads running within mobile apps had a significantly higher play rate at 14% than those run in mobile websites, at 8.3%.   Interestingly however, the completion rates evened out at around 53% for both in-app and mobile web.   Native mobile video ads (running within the newsfeed of a social network) also performed extremely well when served within the platform app, with completion rates at 81.6% compared to only 25% for mobile web platforms. Mobile video native ad play rates were lower than on standard ads however, at 9.7% versus 14% for a standard mobile video ad.

Celtra mobile-video-ads

Results from Celtra Mobile Display Ads Performance Report – Q1 2014

The Celtra and Unruly results are high compared to industry benchmarks. In April 2014 the MMA released a global industry benchmarking study for Mobile Video Engagement.  The study reviewed one month of data (March 2013) from six mobile publishers and found average CTRs closer between 1.4 and 2.6%.   Obviously the results were dependent on the publishers reviewed in the MMA study and the nature of the platforms into which mobile video ads were being served.   There would be significant difference between click to video ads in a largely non-interactive platform and compelling Rich Media ads served into a high engagement, social or native environment.   What the MMA also found was that completion rates were consistent across ad length but that CTRs dropped for ads longer than 30 seconds. This is unusual, given that customers don’t know how long the ad is going to be until they’ve already clicked. It does suggest that customers are able to identify at a glance the nature of longer video ad, and tend to avoid clicking in the first place.   The MMA also noticed that there is a high-engagement, late night window during which completion rates peak – indicating a prime opportunity for certain customer groups.

What’s interesting about the shift of ad budgets is that mobile is progressively leapfrogging all of the traditional ad media.  In Australia, mobile advertising spend has toppled magazines.  In the US, magazines, newspapers, and radio have fallen by the wayside.  The last remaining advertising juggernaut is TV, and the dominant advertising format for TV is video.  This article on Exchange Wire presents a compelling overview of the situation.  As also identified by the IAB, it is the fusion of mobile with video that maps the almost inevitable path to mobile dominance of ad spend.

The final challenge will be the translation of the one way broadcast model of video that we see on TV to an interactive, targeted approach better suited to smartphones and tablets.  This is where we need to see the most innovation, particularly in the areas of HD delivery on small screens, developing interactive models and targeting to build relationships with the support of effective reporting and analytics.    We will go on to explore recent developments in these areas later in the week.


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