Native mobile video advertising: The new TV for advertisers and SMEs
9 min read
29 May 2015
If you’re a brand that relies on TV to reach your audiences, you might be worried as cost and distractions can be factors impacting the reach. However, big brands and SMEs alike have a new opportunity to engage their audiences with native advertising.
You’re probably seeing consumer segments spend less time watching TV, according to eMarketer. You could be concerned because they spend more time on their mobile devices. And you may fret because they really don’t want to watch your ads on their most ‘personal’ device.
From the info-snackers who turn to their mobiles when the TV commercials start, to the ‘light-TV’ audiences who rarely tune in, you might be concerned that your audiences are going where TV advertising cannot follow.
How do you get back into their world? You need to replicate the TV experience, but complement it on a mobile device. And you need a format that they don’t automatically ignore.
It’s called native mobile video and it may well become the new TV for advertisers. Facebook, Twitter, Snapchat and many other big mobile apps are adopting this new video ad format because consumers seem to like it and brands are investing advertising dollars.
Native video 101
Instead of appearing in segregated ad slots, native ads fit into the user interface. All the ads on the big social network apps are native, because they’re tailored for their interfaces. No clunky banners, just elegant ads that slot neatly into place.
Within native, video ads start playing when a page loads or, for scrollable apps and mobile sites, when 50 per cent of the ad is visible. Next time you scroll through your Facebook mobile app, notice what happens to a scrollable video ad: when it hits 50 per cent visibility, it plays. That’s because it’s a native video ad, designed to fit within the interface.
This approach yields benefits. The UK Association of Online Publishers recently found that two-thirds of consumers thought native advertising more interesting and informative than traditional formats. Other studies have found native to offer clickthrough rates of up to ten times that of other formats, that people view native ads 53 per cent more than banner ads, and native advertisements show a nine per cent uplift in brand affinity and 18 per cent uplift for purchase intent compared to banner ads.
The shape and size of the market
The mobile video ad market can be best broken down by formats. The major formats are VAST (Video Ad Serving Template), a standard developed by the Internet Advertising Bureau (IAB); HTML5, which uses your device’s built-in capabilities to display video; pre-roll, which appears before footage (think YouTube); reward, which pays you in some form of credit for watching a video (for example Fyber); and native.
The major native mobile video players today are the big networks. It’s estimated thatFacebook could sell $700 million worth of autoplay native video ads in 2015, while Twitter is testing its own autoplay video features for iOS users.
Elsewhere, Snapchat is winning plaudits for its mobile-native video offering, which hasenabled its CEO to reveal IPO plans, and more recently Yahoo announced new native mobile video ad initiatives.
To place a value on this, we estimate the global native mobile video advertising market at approximately 250 billion ad impressions annually. This is based on Facebook hitting four billion total daily video views, of which three billion are mobile, of which two billion are user video uploads and one billion are paid-for ads.
Estimating that Facebook’s share of the market is ten per cent (with the remaining 95 per cent being made up of Twitter, Instagram, Snapchat, Yahoo, other big apps developers and ad exchanges). At an estimated average price of $5 CPM (Cost-per-Mille) for native mobile video, this values the market at over one billion dollars for 2015.
Continue reading on the next page for the brand opportunity and how SMEs can benefit.
The brand opportunity
There’s an opportunity for the native mobile video market to tap into the $200 billion global brand TV market.
Firstly, everyone agrees that there is a dynamic at play here, where time spent on mobile is growing and ad dollars have been slow to follow consumer eyeballs. We passed the mobile vs desktop tipping point quite some time ago, and in 2014 mobile was regarded as the successor to TV ad spend. However, analyst Mary Meeker’s latest Internet Trends report claims that there remains more potential behind mobile.
So why, within mobile, should native video advertising be the natural successor to TV?
Firstly, consumers understand video because everyone has grown up watching commercials on TV, but when they switch over to mobile, they switch off from advertising. So, a video format that stays front and centre of the user’s attention without being ignored because it’s an ‘ad’, is more likely to win with agencies planning campaigns for brands.
Secondly, brands and agencies understand it too. They’ve spent over 50 years developing video content, from the first TV ad through to the global $200bn TV market we have today. It’s a neat way of capitalising on this huge amount of collateral, while joining up brand stories across audiences.
Facebook knows all about this opportunity, and is pushing mobile native video hard. It understands that moving visuals make for strong consumer engagement. If, one day, Facebook were to switch on sound in its native video ads by default, it would have the nearest thing to TV advertising on a mobile device.
For SMEs which make up over 99 per cent of private sector enterprises in the UK, mobile will become the main channel to market. The latest Mary Meeker Internet Trends 2015 report shows that time spent on all media is reducing, while mobile consumption continues to grow year-on-year and has already overtaken TV consumption in the UK. Mobile is challenging TVs old business model for advertising budgets.
TV advertising for SMEs requires some level of commitment in terms of duration, with local or regional TV stations pricing 30 second ad spots in the low thousands. Mobile native video presents a cheaper alternative in the range of five to ten pounds for every one thousand videos viewed. The real value to SMEs of choosing mobile over TV is the granular targeting, reporting and the option to pay for performance – this will be interesting for direct response TV budgets.
Is native mobile video advertising for you?
Right now, the key consideration is whether you rely heavily on TV advertising.
The biggest spenders tend to be retail, automotive and tech companies. So, if you are offering something to buy, drive or play/work with, then you might want to start considering mobile native.
The chances are you’ve already seen the eyeballs moving away from TV, and mobile native video could offer the opportunity to become the first screen once more.
However, cross-screen will be the way of doing things eventually. Everything is fragmenting, with more ways of viewing content across more devices. Given that the 2015 Super Bowl saw a significant shift from TV to mobile, the earlier brands investigate how to follow these audiences, the better.
Right now, Facebook is king of mobile native video. But be in no doubt, as far as the inevitable changeover from TV audiences is concerned, mobile native video is the king-maker.