VPAID 2.0 and Video’s Superiority over Display will Fuel Mobile Video’s Growth in 2015 #MWC

Allen KlosowskiWhile we’ve had at least six or seven ‘years of mobile’, the video side of mobile has for the most part been regarded as a promising sideshow. However, mobile video is now booming and 2015 and looks set to be the year that mobile video comes of age. Here Allen Klosowski, VP, Mobile & Connected Devices at SpotXchange, explains why the hype around mobile video is entirely justified. 

Mobile video advertising is growing at a staggering rate. Aside from improved smartphone penetration, what’s driving that growth?

Simply put, video is more powerful than banner ads and advertisers know this. Sight, sound, and motion that is delivered full screen to an audience that likely has full attention and headphones on when consuming video content on their mobile devices.  Video ads are memorable. Most people can probably tell you something about the last video ad they saw on their smartphone, but completely tune out the thousands of tiny banner ads they see peppered through the content. Video is also much better at conveying the desired message than a static image. It works for CPI campaigns showcasing the latest mobile games, automotive, consumer goods and beyond.

Smartphones have also become smarter and more powerful, with bigger screens and faster data connections globally than ever before. Even most low-end smartphones now have fast processors the easily high definition video playback.  A few years ago, to do delivery video advertising on mobile at scale was difficult due to a hodgepodge of technology standards and limited publisher inventory.

This has shifted drastically in the past 24 months. Standards related to the actual video playback on the devices themselves have gone from a fragmented mess to widely-supported by device makers, publishers, and advertisers. For example, SpotXchange has been an early and strong proponent of the VPAID 2.0 standard that enables smart and interactive video advertising on mobile devices.  This will be a big trend in 2015.

The shift to mobile is old news for many publishers, with many having long crossed a 50 percent threshold of audience accessing their content on mobile devices. Cross-screen audiences are simply the new normal. Publishers have spent the past few years catching up with the trend, and have done a remarkable job. Most publishers now offer their content everywhere the audience wants to be across screen, and are expanding into new and exciting areas daily.

This means that the devices are more capable, standards are in place on the buy- and sell-side, and publishers now have the ability to offer video inventory at the scale required by top media buyers. Additionally the programmatic infrastructure is in place to enable these agencies to access their target audiences anywhere and everywhere using valuable first and third party data.

What advice would you give to publishers when it comes to devising their mobile video advertising strategy?

​The strategy with display advertising has been to place banners anywhere there is white-space on a website. Buyers will judge the performance of video inventory-based viewability and completion rate, not click-throughs. It’s key to plan for these metrics when considering the placement of video advertising in any mobile environment.

Additionally, many publishers are under-investing in their own first party data.  As a result, they will ultimately be at continuing competitive disadvantage against pure players in the space that have been very aggressive about ​building or buying their way into the data stack. I’ve seen this trend continue to eat away at the revenue and growth potential of many traditional publishers that have ceded their data strategy to third party competitors while remaining unable to speak to the value of their own audience directly.

Mobile advertising spends on video are driven by data usage by primary buyers.  This means that they must be transparent with their audiences to buyers who are looking for very specific signals ​in order to engage with that viewer. ​

The best way for publishers to obtain premium pricing for their own video inventory is to gather and make available first-party data about their audience, and use that data to communicate the special value of that audience, particularly on programmatic environments where data is the key factor in ad purchases. This data can be protected in smart ways that allows forecasting and actionability by buyers and sellers, but does not release the data to a third party.

Subscription-based video-on-demand (SVOD) services like Netflix and Amazon Prime are increasingly eating into TV viewing time. Will this trend force advertisers to increasingly look beyond TV for audience reach? And will it be to the benefit of mobile video publishers?

Consider that the time spent on smartphones has surpassed time spent in front a television. Many people are using their mobile devices while watching television.  The mobile device is the last glowing screen we see before we go to bed, and the first one we see when we wake up. Mobile has extended and amplified digital consumption, and video is leading the way. Best of all, mobile is extremely personal. People share a newspaper, a television, a computer, but their mobile device is typically held close and rarely shared.

Viewers are also highly attuned to the content on their smartphones. Mobile videos typically play full screen with very little distraction, often when the viewer is wearing headphones. It’s an immersive and memorable experience, and much more valuable than a fleeting banner impression. Mobile video viewers are not apt to click-to-call, click-to-purchase immediately on their mobile devices because smaller keyboards make complex transactions more difficult – something many viewers resist.  Instead the mobile video should be considered as an avenue perfect for branding placements as a channel to influence purchase behaviours in a manner similar to television.

A huge amount of mobile spend is currently going to Google and Facebook and in 2013 eMarketer estimated that as much as 70 percent of spend was going to the two tech giants. Is this a trend that is likely to continue or will we see other publishers regain the lost ground?

​Much of that initial mobile spend is deep-funnel activity, albeit in different avenues. Both companies have relatively dominant positions in their respective areas. Google very much owns mobile search from start to finish, and Facebook has been excellent at capitalising on mobile app install revenues. These are areas where traditional publishers are not well-equipped to compete directly, and certainly both areas are still growing.  However, there is also a fundamental shift happening in the mobile ad space from purely performance into realising the potential to reach premium audiences to drive brand awareness.

At SpotXchange, we focus on delivering cross device audiences to programmatic buyers through our advanced SSP offerings for publishers.  As a result it’s been the fastest growing segment of our business two years in a row, and we’re consistently seeing over 500 percent year-over-year monthly growth in branded video campaigns being delivered programmatically on smartphones and tablets. More major brands are entering the space daily. With billions of daily mobile video opportunities provided by SpotXchange publishers, there is scale to reach even the most precise audience segments.

We recognise that this is a huge opportunity for publishers to create new opportunities that leverage their established brand equity and premium audiences to drive more revenues on mobile devices. In order to help enable video monetization for mobile publishers, SpotXchange has evolved our platform for to include mobile video players, SDKs, and ad-serving tools for mobile web and mobile app, while embracing new standards like VPAID 2.0 which will deliver new insights and ad format opportunities to advertisers.

​Many in the mobile advertising world are excited by the in-store beacons that will allow retailers to target shoppers with coupons, messages and advertising. Will beacons be useful to mobile video advertisers?

​The beacon strategy is very interesting, and presents an opportunity for native advertising inside a retail environment. A video review of a product that is easily triggered by a user can provide the incentive to purchase or provide an opportunity for an up-sell to a more expensive product or additional complementary products.  The key will be getting user adoption at scale, and making it as seamless as possible for users without becoming overwhelming. Retailers may be able to additionally monetise things like end cap space to paying video advertisers for an additional fee. There is a tremendous potential as this space evolves.

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