Borrowing from the title of the milestone presentation Mobile is Eating the World (given by mobile analyst and authority Benedict Evans at Andreessen Horowitz’s Tech Summit 2014) is the best way to describe how mobile video—powered by mobile programmatic—is poised to rock the digital world in 2016. Top line numbers show mobile video viewing is already eating into desktop’s leading share of video views. It’s a migration that can be attributed to the advance of high-speed 4G mobile networks that reduce latency, making mobile video accessible and enjoyable for more consumers in more markets.
In the U.S. alone, research firm eMarketer reports, one in three consumers watch video on their mobile devices, which means watching video on mobile is already more common than using devices to listen to music. There’s also mounting evidence that people who watch video on their smartphone are giving it their full attention.
Recent research from Google and Ipsos—based on a survey of 1,519 smartphone owners between the ages of 18 and 34 who were asked to keep a detailed diary of all of their online and offline video interactions—suggests that watching video on smartphones is “far less distracted than it is on TV.” Specifically, watching video on TV was the sole activity for Millennials for just 28% of the time. (The rest of the time they were watching TV was spent multi-tasking—eating, texting, chatting to a friend, or even cooking.) In contrast, watching mobile video was the sole activity for over half (53%) of respondents.
Mobile video doesn’t just command our attention. It’s also emerging as the best way to explore products and offers before making a purchase. This is the key takeaway of research conducted in February 2015 by Animoto, a company that provides an online video creation application. Vendor spin aside, the findings indicate consumers don’t want to spend time reading about a product, they want video.
The space available on smartphone and “phablet” screens may be small compared to TV and PC screen, but the effectiveness of mobile video content and advertising is set to reach new heights in the year ahead—particularly now that mobile video is also rising up to take a central role in influencing and enhancing the purchasing process. It’s why mobile video ad spending is already growing faster than any other digital advertising format. Data from a January 2015 ad buyer survey from Cowen and Company (behind a paywall) reckons mobile video ad spend will reach $8.6 billion globally in 2018.
But not all companies will be in catch-up mode in 2016.
U.K.-based startup LoopMe is positioning itself to pull out ahead of its rivals with a mobile video programmatic platform that taps Artificial Intelligence (AI) and “deep personalization” to deliver ads that are “laser-targeted” to individual users.
As LoopMe CEO Stephen Upstone puts it: “The biggest challenge for brands and marketers is around finding ways to reach their audiences effectively, efficiently and appropriately. To make this match, and deliver mobile video ad campaigns that drive results, requires intelligent targeting.” The solution is data—which is why LoopMe has developed a solution that combines the full range of mobile video formats (Pre-Roll, Full Screen Interstitial, Native, Portrait, and HTML5) with a mobile data management platform.
“Employing this Artificial Intelligence Engine to mobile advertising allows LoopMe to deliver a 300% uplift in campaign performance,” Upstone says. “Brands can take advantage of precision targeting, based on many layers of data, without drastically reducing their reach.”
LoopMe’s clients include Apple, Adidas, Coca-Cola, Microsoft, Jaguar and Unilever—a roster sure to expand since the company hit profitability in December amid a wave of global activity that has seen it complete a new round of funding. The Series A funding, conducted in two rounds, totals $7 million with investment from Holzbrinck Ventures and Open Ocean, as well as private Chinese investors. The funding follows a deal with leading Chinese app companies—Cheetah Mobile, Sungy, and Baidu—which LoopMe claims allows it to reach over 1.25 billion users worldwide.[/entity]
Programmatic advertising as a whole has reached a tipping-point, more than doubling each year for the past two years. But as mobile has become number one for consuming content and marketing, it has also become the biggest area of opportunity for programmatic, according to research by RBC Capital Markets and Advertising Age.
Agencies need little convincing of the massive opportunities at the intersection of mobile video and programmatic advertising. The BrightRoll 2015 Advertising Agency Survey calls out mobile video as the format that will see the largest increase in digital media spend. The same survey asserts increased confidence in programmatic, revealing that “4x more respondents plan to dedicate a majority of digital video budgets to programmatic” in the next 12 months.
“The mobile video ad space is taking off because it combines the power of sight, sound and motion allowing marketers to drive higher completion rates and encourage deeper engagement,” observes Paul Davison, UK Head of Digital Trading at digital ad agency Dentsu Aegis – Amplifi. At one level, he says, success depends on having a command of all the video formats. “But it’s mobile programmatic and the ability to deliver data-driven video advertising that fits consumer context that will separate the best advertisers and agencies from everyone else.”
This dovetails with a recent report from the University of Oxfordthat suggests a mismatch between content and advertising—in this case, energetic TV commercials sandwiched in between serious drama content—results in shorter viewing times and lower brand recall. The research, based on a study of 900 people, found that high-energy ads shown during moments of tension in a show or movie was a huge turn-off for consumers.
In a statement Nancy Puccinelli, associate professor of marketing at the Saïd Business School in the University of Oxford urges advertisers and companies to rethink the context of their ads and “consider how the media induced emotion interacts with the energy level of their commercial.” It’s not a leap of faith to imagine the rules that govern TV and video-on-demand services also apply to mobile video.
Luis di Como, Senior Vice President Global Media at Unilever shares the same enthusiasm. As he observed: “Recent research from the Mobile Marketing Association shows the effectiveness of mobile advertising and, in particular, the strength of mobile video advertising combined with data and context targeting.” This, he says, dovetails with what Unilever is also seeing. “Video has long played an important role in building Unilever brands and now that consumers are spending more and more time with mobile media Unilever is working to understand how best to use mobile video and other mobile ad formats.”
But brands aren’t the only ones bullish about the popular appeal of mobile video ad formats and creatives. Mobile app companies are also grasping the opportunity with both hands—stepping up video advertising budgets to raise their profile, not just drive downloads of their app.
A prime example is Game of War: Fire Age, a mobile game that dished out for a commercial ad spot featuring supermodel Kate Upton during the Super Bowl— smartly parading Upton in revealing armor and successfully targeting the young male demographic. The advertising campaign is reported to have cost the free-to-play mobile game company a whopping $80 million in total. But it has also paid off, helping the app company to rake in a cool $1 million per day.
Meanwhile, a new campaign for the Supercell game Clash of Clans has enlisted Christoph Waltz—a bad guy in the latest James Bond film, Spectre—and James Corden—host of The Late Late Show with James Corden—to tell stories based on app users’ real-life gameplay and achievements. The video ad launch last month is the cornerstone of the company’s first fully integrated campaign, which spans video, social media, and large-scale outdoor and high-impact placements.
With 1,200 apps coming on line daily (based on January 2015 figures from Pocketgamer.biz), the first and biggest challenge for app companies and marketers is to build awareness around their app and, more importantly, keep the momentum going. It’s why LoopMe, which already works with mobile games app giant King and Uber, the popular on-demand car hire app, expects to see more app companies embrace its platform to deliver mobile video advertising and so stand out from the crowd.
But no matter the platform or the mechanics, evidence is mounting that advertising may indeed be the best solution to the “Discovery Dilemma” that leaves most apps (those not featured in the app store) to grow stale on the shelf.
The State of App Discovery 2015 report drawing from an online poll of 2,100 smartphone users in the U.S. and released in September 2015 by attribution analytics company TUNE reveals that the way we find apps is undergoing a seismic shift. Unsurprisingly, search is the most common way we find apps (67%). But it does come as a surprise that the majority (61%) of users who performed an app store search actually searched for a specific app by title instead of a more general term. I read this as a clear signal that brand is beginning to matter—a lot. Moving forward, app companies are advised to harness mobile advertising—and, above all, mobile video advertising—to build a strong brand that will engage and entertain users that crave experiences, not marketing.