Background Overview & The Market
Even though video advertising has a long track record of success on both TV and the World Wide Web, it has been slow to come and be established to the mobile medium. In the past, mobile video advertising faced many technical and creative challenges for advertisers and marketers because of the device fragmentation, the inability of various devices to support rich media, true scale, internet connection speed and the ability to drive and deliver an effective message to the end user.
These issues derived from the hyper-fragmentation of hardware and software support across multiple handsets and operating systems. With hundreds of differentiated mobile handsets in the marketplace, delivering compelling advertising content with scale has been proven difficult since there is the need to create the video in four (4) different formats, nearly impossible.
Lately, and with the introduction of HTML5 since over a year, developers and advertisers have been presented with the opportunity to provide and deliver mobile video content to various handsets. Advertisers have become familiar and begin to develop mobile video creative ad units that are truly scalable while at the same time are solving fragmentation issues with the various devices. HTML5 seems to be a viable solution since the majority of smartphone devices and handsets support these experiences.
Mobile Video Advertising can be broken down into three vehicles of deployment:
Single Stream – Ad Stitching
Single stream ad stitching is primarily utilized across mobile web sites and other mobile web destinations. This method of video ad delivery is the most efficient way to reach scale across a large percentage of devices that support video.
Single stream video ads cannot support interactivity or click-thru destinations since the stream prompts the device’s native player to open up in full-screen mode, apart from the Android devices. Additionally, in order to deliver video ads across all mobile devices the ads need to be stitched against content and delivered to the mobile video player in one stream.
Dynamic Ad Insertion – Non-Stitched
iOS apps can support dynamic ad insertion because the iOS SDK enhances developers with access to customize the native video player. These players can support dynamic ad calls in pre- or mid-roll positions. It’s much easier to control the video ad experience within an iOS app than any other web destination.
In order to support dynamic ad insertion in a mobile web environment, a HTML5 video player would need to be developed directly into the player. In addition, the HTML5 player would only be supported by a small number of handsets.
HTTP Live Streaming – Best Experience
HTTP Live Streaming is a video and audio protocol mainly used by Apple. It delivers adaptive bit rate streaming to iOS devices including Apple TV and Mac OS X. A notable drawback appears when a user is streaming video content on a 3G network. In this case the stream dynamically increases or decreases video and audio quality to support the appropriate speeds of that connection. HTTP Live Streaming also provides for media encryption and user authentication over HTTPS, allowing publishers to protect their work. The HTTP format is highly used from advertisers and marketers on their mobile video campaigns, as it can be supported on various devices and operating systems.
mVideo Advertising in Action
Since the introduction of HTML5 the mobile video advertising area has begun bringing in the industry a number of worthy and competitive companies specializing in the delivery of interactive and engaging scalable mobile video ad units and inventories for applications and mobile websites.
We come across on a daily basis to more and more applications that offer the user the chance to win virtual or sometimes even actual rewards by playing an mVideo advert from a publisher. Users are required to watch the entire video ad unit in order to collect their prize.
Mobile video advertising is a great example of performance based mobile marketing as video ads get charged per click or per video competition. Therefore advertisers and brands get charged when a user completes a full video view or clicks while the video is playing to be redirected to a mobile landing page or download content.
A number of companies have now incorporated mobile video advertising in their platforms and their solution offerings in the form of mobile video pre-rolls and expandable banners.
Tap Joy has also entered the mobile video advertising era through their latest mobile video advertising platform. Mobile application monetization and distribution platform Tapjoy introduced a new mobile video advertising service enabling marketers to sponsor content within popular apps.
Through their platform, consumers can select the ad they wish to watch, which guarantees greater interest and engagement compared to automatically generated promotions. Upon completion of the ad, consumers can choose to follow the brand on Facebook or Twitter, forward the video to friends, visit the advertiser’s website or make purchases directly via mobile device.
An interesting study has shown that the most engaging and viewable videos to completion are the in-app pre-roll ads.
As shown in the chart, almost 90% of mobile video ads are watched between 75% and 100%. Very few customers, at least at the moment, are trying to skip out or skip over the ad.
Limitations
A major concern with video ads on mobile devices is the completion factor. Most video ads on the internet are not viewed to completion. Another concern is the high inventory of video ads. Some marketers report that there are too many for decent exposure rates. A possible solution to such limitation is for advertisers to offer incentives for completion, such as premium content within apps or games or physical goods, as already mentioned above.
A common problem that falls upon mobile video adverts is the high rate of data consumption. One solution to address such problem is for the mobile companies to provide and come up with better video compression technologies and therefore limit the data consumption for the end user to the minimum.
Many creative agencies do not hold the technical know-how to develop and serve such campaigns, placing the weight of creative development back onto the publisher or the ad network. As consumers crave for technology expands, and as content providers demand to keep up with the way users consume their content, advertisers must find the most effective way to deploy and reach their target audience.
Advertisers have already started becoming well-versed and begin to develop mobile video creative that is truly scalable while solving fragmentation issues. HTML5 seems to be a viable solution since the majority of smartphone devices and handsets support these experiences. Until then, publishers must continue to facilitate proper creative deployment as well as educate clients on industry best practices.
Market Opportunities
Most mobile users use applications and most of them spend a significant amount of time on their mobile devices. If all applications embed video ads, ads that tried to minimize intrusiveness, then the exposure rates would be significant regardless of how significant or content rich the videos are. Incentivizing them with rewards and enabling them to choose whether to watch the video ad or not or even select the ads to play, increases the chances of the mVideo ads to be watched.
The ability to choose between publishers and videos to be played enables the advertiser to apply a more targeted mobile optimized video campaign. The incentive to provide different rewards based on the content to be watched opens up a new area in mobile advertising, the performance based mobile video advertising age.