Mobile Is About to Get Serious About Video Ads

Mobile marketers beware: A new ad format is poised to become very popular and very much in demand — and there are questions whether the mobile ecosystem will be ready to handle it.

That format is online ads. Of course, it is a channel that has been around for a while, and mobile sites have adapted to it.

However, “it’s reasonable to assume that online video will play an increasingly larger role in mobile advertising,” said Craig Palli, chief strategy officer at Fiksu.

“Today’s rapidly maturing mobile ecosystem is seeing an increasing volume of video content consumption, and we expect advertising to naturally follow,” he told CRM Buyer.

Can mobile sites handle the scale and demand that a Facebook juggernaut will deliver? For that is what will be fueling this next wave of video ads.

Facebook itself has made little mention of this strategy. It was all but mum about it during its recent quarterly earnings call, for instance. Still, the expected debut of a video ad format for Facebook has been widely covered in various media (most recently by Bloomberg, which provided some details about the US$2.5 million, 15-second spots under development) and the general expectation is that Facebook will sooner or later allow marketers to embed online video ads in the News Feed.

“As seen with the success of their mobile app install ads, Facebook has a knack for finding a balance between delivering highly relevant ads while respecting the customer experience,” Palli said. “It’s likely that they’ll find the same balance with video ads.”

Speedy Scale-Up?

One concern is that even the largest marketers have invested only a tiny percentage of their ad dollars in mobile video marketing; even the percentage devoted to online video ads is relatively small.

To get some idea of this gap, consider recent figures from Competitrack’s Online Video Ad Tracking service: It reported that 20 brands spent more than $10 million on the online video ad medium last year, with leading brands allocating 4 percent to 6 percent of their media outlays to the format. On average, the top 100 brands allocated 1.5 percent of measured media spending to online video during the year.

It is understandable that mobile video has not grabbed more attention or bandwidth from brands in the absence of a compelling platform like Facebook. Mobile, in short, is currently in the category of nice but not quite essential for most brands, Erik Dochtermann, CEO of KD+E, told CRM Buyer.

Can Brands Be Persuaded?

Another concern is that brands are not necessarily convinced that mobile video will be a major platform, even after Facebook does enter the space. They have a point — any number of promising ad formats have spectacularly crashed and burned. Still, the expectation of a significant shift in this direction is strong enough that brands would do well to avoid being caught unawares.

Services like Hulu Plus, Vevo, Crackle and YouTube “are giving mobile viewers more options than ever as they become accustomed to consuming video content remotely,” noted Dochtermann. Additionally, video consumption on smartphones is highest among millennials, “giving brands targeting this demographic more reason to consider mobile video.”

Mobile video ads are still novel enough to make an impact on viewers, Cynthia Gallatin, associate vice president for online education at Quinnipiac University, told CRM Buyer.

Sixty-five percent of mobile searchers participating in a recent survey reported noticing ads, and 59 percent of those mobile users found ads useful, Gallatin noted.

Users liked the fact that the ads were relevant, short, not intrusive, and quick to load, she said.

“I believe businesses will want to include video within their mobile ads, since consumers are using their mobile devices extensively for personal and business purposes,” Gallatin said. “This will be a phenomenal way for businesses to capture the attention of prospective customers and increase the conversion rate for action.”