October 1, 2012
Mobile video advertising is on the rise worldwide. Last month, I touched upon the rise of mobile video usage in Japan and mentioned that other countries experiencing rising smartphone usage and LTE subscriptions would follow suit. Last week, new data released from mobileSQUARED predicted that mobile video will be the “most powerful form of advertising” in the next four years in the Euro 7 markets (France, Germany, Italy, the Netherlands, Russia, Spain, and the U.K.). This is attributed to their claim that as much as 79% of smartphone users in these countries are consuming video-based services.
Earlier this month, a certain app analytics and advertising company hit a milestone of 100 million mobile video ads served. The company claimed that video ads on their network saw eCPMs of $12 to $15 and a fill rate of 75% in developed markets and 30% in emerging markets. (On a related note, the latest data released through eMarketer shows that 69% of U.S. luxury advertisers plan on increasing their use of video formats in 2012, as opposed to 68% for mobile formats.)
Need I elaborate anymore on what this means for the mobile advertising industry? Mobile video advertising is hot. Mobile video services consumption is increasing, and since free mobile videos need to be monetized somehow, more ad spend will be allocated to this channel. More advertisers will jump on this bandwagon, and many already have. As a matter of fact, YouTube rolled out skippable mobile ads last month—advertisers only pay if a viewer watches their ads for 30 seconds or until completion. Advertisers will need to pay more to reach YouTube viewers, meaning eCPMs for mobile video ads will likely remain high, at least for those run on YouTube. Meanwhile, publishers with smaller video inventory likely won’t introduce skippable ads, as doing so would mean losing video ad revenue. On the other hand, that would mean more consumers would flock to YouTube to get their fill of mobile videos. It would be interesting to see how things turn out in mobile video advertising.
Based on the info above, below are some key highlights and takeaways I think are important for mobile marketers & advertisers to consider.
- Mobile video consumption high in Europe
- Mobile video ads are seeing high eCPMs relative to other mobile ad formats
- YouTube rolled out skippable mobile video ads this past August, which viewers love
- All of the above point to mobile video as the next big thing in mobile advertising
- Larger portion of digital marketing budgets will be allocated to the mobile video channel as mobile video consumption rises
- YouTube’s skippable mobile ads make it more expensive for advertisers to reach viewers through YouTube
- YouTube’s skippable ads could lead to a slight decline in viewership for smaller publishers who cannot afford to roll out this format, which would lead to interesting effects in the mobile video ad space