The Rule of Three: Mobile, Video and Native Advertising Converge

Kevin Flood, CEO, Powerlinks

While most people would agree that the worlds of native, video and mobile advertising are all related, the industry hasn’t always done a great job of uniting all three as a cohesive offering. However, in 2015 a number of players and partnerships have been fuelling the rise of native mobile video (or ‘NMV’ as we’re going to start calling it on VAN). Here, Kevin Flood, CEO of Powerlinks, explains the importance of this trend, the industry dynamics behind it, and how bringing native, video and mobile together can deliver meaningful results for both advertisers and publishers.

In recent years, we’ve read innumerate articles and forecasts claiming that the year of mobile is upon us – interspersed with video, programmatic and personalised creative jostling for the title. 
Taking a step back, the reality is that we’re half way through the decade of mobile, within which programmatically transacted advertising has laid the foundation for media owners and brands to invest in engaging content and truly cross-device user experiences.

Of the world’s 7 billion people, 4.55 billion will use mobile phones this year, according to eMarketer. Furthermore, the average user spends three hours and sixteen minutes per day on their smartphone, carrying out over 221 tasks and using 26 apps according to Tecmark and Nielsen respectively.

There is no question that mobile adoption has surpassed all other personal devices, and each year advertisers and publishers have made significant strides towards enhancing mobile user experiences, engaging mobile audiences and monetizing the channel. The rapid growth of mobile content consumption has triggered a cross-platform approach from content producers and media owners, rippling the same approach into the marketing mindset.

Mobile advertising hasn’t been without its growing pains, however. Publishers have, for the most part, yet to achieve sustainable CPMs and notable revenues. Marketers have struggled to communicate messages within the constraints of 300×50 pixel ads. Sticky, persistent banners and clumsy-thumb accidental clicks have left a bad taste in the mouths of consumers and marketers alike.

Whilst programmatic buying is a perfect approach to mobile advertising, providing audience reach and insight at scale across the millions of apps and touch points, it has still taken time to navigate cookieless targeting and to understand how to efficiently leverage new data points around lat/long coordinates and device information.

As we reach the point of stability around mobile programmatic advertising, with mobile attention minutes exceeding that of any other device, we have to look to some shining examples of mobile success to understand what the future might hold for the market.

Amongst the most notable mobile-first forerunners, Facebook, Twitter and LinkedIn are the headline acts. Facebook’s Q4 Earnings Call revealed that mobile ads accounted for about 69 percent, or $2.5 billion of overall advertising revenue, with 745 million mobile active users, up 34 percent year-on-year. Most notably, Facebook has never served a mobile banner ad, but generates all mobile revenue through in-feed native ads, enabling brands to reach audiences with sponsored posts and video ads which are seamlessly integrated and consistent with the look and feel of the organic social experience.

Remarkably, in just one year, the number of video posts per person on Facebook increased 94 percent. Today, over 50 percent of people in the U.S. who come to Facebook daily watch at least one video per day, and globally, over 65 percent of Facebook video views occur on mobile.

Accelerating the Move to Video at Scale

Whilst Facebook doesn’t decouple mobile revenues specifically from sponsored video, it is plain to see the size of the opportunity for both Facebook and across the industry. When speaking to The Drum, Yoav Arnstein, head of EMEA at LiveRail (Facebook) said “Native video ads will be prominent within a few years and it would behoove publishers who are building or revamping their apps, to keep native video ads in mind”. Yoav also noted that we’re reaching the point of stagnation in available premium inventory, with in-feed ads presenting an ample opportunity for publishers to create new, engaged video audiences whilst preserving user experience.

Twitter is also ramping up in-feed video, with CEO Dick Costolo promising “a lot more on the video front” in their last earnings call. With Vine in Twitter’s stable and the recent acquisition of live streaming video service Periscope, Twitter has been building up its own 1st party video credentials. Following on from their launch of promoted video ads in August 2014, Twitter are rumored to be preparing to launch autoplay previews and a user-initiated pay-per-click model.
The rise and rise of in-feed video ads is significant on several fronts. With proven benefits, responsive design and feed based user experiences are being adopted across the majority of content led publishers.

In-feed video provides an opportunity to deliver brand video beyond the pre-roll. The majority of in-feed ads are user initiated, opt-in experiences, providing an altogether different level of engagement and performance whereby the initiated view is a metric in itself. Delivering video in native formats is a chance to illuminate branded content which advertisers are investing heavily in producing.

With the growth of YouTube video channels, alongside the emergence of micro-video pioneered by Vine and Instagram, brands are becoming content curators and creators directed by one to one social interaction with their audiences. As a result, we’re witnessing a proliferation of branded content which ranges from 6 seconds to 10 minutes, adding value for viewers through information, education and entertainment. The pairing of such content with amplification through user initiated in-feed ads is a channel emerging at scale, with CPC, CPV and CPE models enabling brands to pay for performance.

Power to the Publishers

During an interview with VAN, Atul Satija, CRO at InMobi, asserted that native mobile video advertising will enable smaller publishers to compete on a more level footing with the tech giants. As it stands, 68.5 percent of mobile ad spend in 2014 was shared by Facebook and Google alone. While that might seem like a frightening market share, established audiences of the major social platforms creates a foundation for buyers to invest in native and in-feed video. Platforms and partnerships such as Rubicon with InMobi or the one between PowerLinks and Pubmatic are providing scale for programmatic native advertising across the rest of the mobile web.

The proof of effectiveness is in the data, with Sharethrough and Nielsen reporting that native video ads generated 82 percent greater brand lift when compared to pre-roll. Furthermore, a study by AdRoll showed that the CPM is 57 percent lower for in-feed ad impressions on mobile than on desktop, while the click-through rate is 10 percent higher. This makes the cost per click 61 percent lower on mobile. In other words, brands will probably get more from dollars invested in native mobile ads, primarily as a result of greater user engagement and inventory scale.

The efficiencies of native advertising are only likely to improve, with better standardization for programmatic buying and selling alongside more education around creative assets and optimization. Importantly, the recently introduced programmatic native standards in the IAB’s latest version of OpenRTB, strives for adoption of VAST from native in-feed sellers, bringing creative format and distribution in line with mainstream programmatic video.

We should expect to see explosive growth in scale, spend and performance as mobile, video and native advertising converge. All signs point to this emerging channel finally fulfilling the promise of mobile, simultaneously providing a sustainable foundation for brands to invest in valuable content and publishers to create a next generation, responsive and visually stimulating internet.

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