Mobile video is outgrowing other ad formats, especially in Asia
Mobile video is outpacing the growth of most other ad formats and is changing the face of digital advertising, especially in Asia. According to a 2015 report by Ficci-KPMG, mobile ad budgets in India touched the INR 5.2bn ($78m) mark of which video constituted a significant 35%. Consumers are fed up with display banners and pop-up ads, video ads offer a way for advertisers to communicate with consumers on a more personal level.&nbsp;A&nbsp;successful video ad has the potential&nbsp;to go viral on social media, diverting traffic back to the company app. Twitter and Facebook have already starting updating their features&nbsp;for video ads to help increase viewership numbers. &nbsp;&nbsp;
People are streaming more video content on their mobile devices than they have ever done before. And as the world of marketing continues to follow the eyeballs of consumers, we as an industry can expect more digital ad dollars to start flowing into the small screen.

The Ficci-KPMG 2015 report has observed that mobile advertising budgets in India have touched the Indian rupee 5.2 billion (US$78 million) mark of which video constitutes a significant 35 percent. Video has outperformed all other online ad formats by garnering the highest compound annual growth rate of 56 percent between 2012 to 2014 with a budget spend of Indian rupee 330 crores (US$49 million).

Video is also outpacing the growth of most other mobile advertising formats and establishing itself as a powerful tool to deliver content, engage consumers and turn them into loyal fans with its unprecedented social reach. Mobile video ad spend is expected to see the highest growth rate in the coming years compared to other digital ad formats, according to eMarketer. In the U.S., advertising spends for mobile videos have surged from $720 million in 2013 to $1.5 billion in 2014, and this is expected to reach $6 billion in 2018, or almost 50 percent of the country’s total online video ad spend.

India, too, is poised to witness an exponential growth in mobile video ad spends over the next few years. According to a KPMG-IAMAI report, the projected mobile Internet user base will reach 314 million by the end of 2017. Considering that almost 70 percent of online video consumption in the country happens on handheld devices, leading advertisers will have to allocate their digital expenditure to mobile accordingly.

The shift to the mobile screen, however, is not about digital marketing anymore. It’s about marketing in a digital world. While the old order relating to ‘attention, interest, desire and action’ remains relevant, it will fall apart if brands fail to map with today’s connected consumer at key touch points of their ongoing journey. In short, the identity of a mobile video ad campaign will lie at the heart of understanding the customer’s journey and successfully carrying out tailor-made data activation.

Video Key to Mobile Economy

For online consumers, pre-rolls (though better than most other ads) and static banner ads, or even the dreaded pop-ups, are passé. Advertisers have started believing in communicating with the customer with personalised content.

Mobile video ads are gaining traction, primarily because handheld devices offer a more personalised experience than videos watched on desktop computers. Technology improvements, super-fast smartphones with 3G and 4G connectivity, and superior interactive touchscreens are only facilitating the delivery of high quality video on handheld devices. Most importantly, mobile video campaigns are encouraging engagement and allowing users to know precisely what they are getting into.

What it means is that video advertising is facilitating users to interact with the app until they get the experience that they have been looking for. That is helping brands to marry their offerings with the content and, at the same time, actively spark user interest for the brand. This is something video on demand (VoD) is providing seamlessly.

An intelligently designed video ad also has the potential to go viral on social media, such as Twitter or Facebook, and divert consumer traffic to the company app, which in turn, helps the brand spread its influence beyond its direct customer base. Giants like YouTube, Facebook and Twitter are already making moves that display this constant revolution.

Twitter recently revealed an auto-play video feature for ads on its iPhone and iPad apps. It was part of an experiment to see whether the ad grabs the viewers’ attention when it starts automatically. It is anticipated that an auto-play feature can boost viewership numbers – an important metric for companies that are trying to get celebrities, publishers and brands to post videos to their pages.

Interestingly, Facebook introduced a unique advertising model with a ‘suggested videos’ feature designed to recommend clips for people based on the snippets they tune into on News Feed.

Challenges of Viewer Perception

In mobile, the growth path is not without challenges. Addressing connectivity issues and pricing, and developing the ability to target the users with personalized content and contextually relevant ads will enable marketers to spend more on mobile video campaigns, will be key.

Grabbing Eyeballs

According to a recent survey by Google, video ads are more viewable on mobile and tablet than on desktop. YouTube has very high viewability on mobile and tablet at 94 percent. This is despite video advertising globally facing a series of roadblocks. The survey says, across platforms like desktop, mobile and tablet, 76 percent of non-viewable ads run in the background tab or are never seen at all, while 24 percent are abandoned or scrolled off-screen within two seconds. Viewability is becoming important for marketers. Nobody wants to pay for an ad that nobody accesses.

To overcome this problem, one can project ads tailor-made for different needs and consumer segments. Also, utilise mobile video on demand (MVoD) platforms catering to disparate content genres such as comedy, cricket, Bollywood, Hollywood, etc. Individual brands can create their own channels, and people can subscribe to them.

Building Bridges

The platform on the technology front has to deal with challenges, including that of multiple bandwidth and multiple screen sizes. In a country like India where there is no stabilised bandwidth, the consumer may experience data streaming issues on their mobiles.

Price Points

The other pain point for VoD players is that they are struggling to make money out of content subscription. Understanding the subscriber’s needs and behaviour is essential to pricing a product. A VoD platform needs to have several price points to work in India and if the app can give value for money, consumers will have it. As this segment grows, it would become imperative for the players to charge for premium/super premium content.

VoD platforms have to devise mechanisms along the lines of a Hulu or Netflix, where a majority of their revenue comes from subscription.

The Way Forward

With just 19 percent mobile penetration, India is already the third largest Internet user base in the world. So, leading advertisers are also eyeing the massive opportunities that the remaining 81 percent of the country, mostly residing in tier-II and tier-III cities, could throw up. The availability of low-cost, large-screen smartphones, falling data tariffs, and the advent of 4G services are only adding to the excitement.

The brands that value the importance of mobile video ads as part of their overall marketing mix will stand to gain significantly in the future to build trust and consumer loyalty to stay ahead of the game.

*Image via Shutterstock