Native video is the "next big ad format"

Facebook's embracing of native video advertising has resulted in 8 billion monthly views and more than $700m in ad sales, with the convenience of autoplay videos in particular appealing to 79% of millennial users, who have a combined spending power of $1.75tn. A study from the IAB revealed that 72% of marketers were planning to increase their video advertising budgets for 2016 as TV viewers slumped, while mobile video traffic is set to increase to 75% by 2019.

If you Google the term “native video,” you’ll be buried in roughly 136 million search results; just under half were generated in the last year. Native video is one ad format on the rise in digital advertising as publishers look for new ways to monetize content without flooding their pages with display. With a video boom taking place across digital media, native video has some fertile ground ahead of it.

Let’s check the numbers: Advertisers have spent $4 billion on mobile ads in 2016, a number expected to grow by double digits through 2020. An IAB study earlier this year found that 72 percent of advertisers plan to increase their video spending in 2016. Among those, 41 percent plan to pull cash from TV budgets to support the shift.

TV viewership is dropping off year-over-year, and mobile is poised to become the mass-reach medium of choice. On the small screen, video will be king, with attention rates that already trump even TV: Smartphone users are glued to their video screen 77 percent of the time while TV viewers glance at theirs a paltry 39 percent.

Matt Minoff, SVP of Digital Platforms and Strategy at Meredith, sees the shift to native video coming: “Over time, ad dollars tend to match time spent. Usually time spent is out ahead of dollars because advertisers are slower to adopt new platforms, at least at scale.”

If you’re looking for proof of concept for native video’s potential, just step into the walled garden of Facebook. The social media titan, which launched a major multi-pronged video push last year, has racked up 8 billion monthly views and over $700 million in ad sales, most of it from mobile. With video traffic sucking up 55 percent of mobile data globally and poised to grab 75 percent by 2019, everyone wants in on a mobile-friendly format.

Like Facebook, most native publishers have employed autoplay features, allowing videos to start rolling the minute they enter the audience’s field of view rather than waiting for a click, and it’s proven popular among millennial audiences. A recent Sharethrough study found that 79 percent of millennials –a generation that packs $1.75 trillion in annual spending power– think autoplaying video is convenient. That means they won’t be turning off marketers’ messages anytime soon.

Furthermore, video hasn’t killed the written-word star just yet. Turns out that 70 percent of millennials read the corresponding headlines for in-feed video ads even if they have the sound muted. That means native video can stick to being less interruptive and still grab serious engagement as consumers scroll timelines or individual article pages.

According to Minoff, muted-but-readable native video takes a page from rich media rather than traditional video advertising to create something engaging. “Your goal is to put something compelling enough in front of the consumer that they actually want to click and watch it with full sight, sound, and motion… it’s a matter of making sure you’re designing content that’s optimized to that specific type of user experience.”

Native video takes advantage of the in-stream experience that defines a growing number of users’ online experiences. Today’s digital audiences spend a substantial amount of the time in-feed. Native video mirrors the form and the functional experience of these in-feed audiences. Its ability to grab eyes and produce engagement positions it to absorb revenue from both static display and television budgets

The open web and social giants like Facebook have both embraced native video it’s proving to be a smart bet for both. With spend projected to rise exponentially over the next five years, the highly-visual tactic is poised to snatch the crown from tired digital formats.