The not-so-distant future of mobile and video

Galia is COO and head of sales for Taptica.
The mobile video advertising ecosystem is headed toward a major eruption. By the end of next year, the industry will take colossal strides to combat fraud and eliminate bogus inventory, while simultaneously working to meet advertisers’ growing demand for mobile video ads. Savvy businesses will continue to buy or build platforms that allow them to offer a complete mobile video ad solution — the content, the audience, and the ad tech — and increase their revenue streams. As with any massive overhaul (and it will be massive), there will be casualties. But, the end result will be more effective and more secure mobile video advertising opportunities to help feed the already burgeoning demand.
Here’s what we know. Advertisers and agencies are scrambling to create or fine-tune their mobile strategies and to contend with the now irrefutable fact that consumers are spending more time on their mobile devices. We’ve been talking about a “mobile-first” media landscape for a while; now it’s time for marketing strategies to catch up with user behavior. Simultaneously, consumer and brand interest in video is mounting, and for basically the same reason: high-quality video is engaging. Neither mobile nor video is without its challenges, but marrying the two helps alleviate some of the issues. Video mobile ads are more engaging than mobile banner ads. Couple that with the rich data we can harness through mobile devices, and you open up video to a host of new marketing use cases. Now we can monitor viewers’ subsequent behaviors and better measure the ROI of our investments. Video isn’t just for brand awareness anymore.
Within the next few years, it’s basically inevitable that the bulk of ad buying, mobile included, will be done programmatically. Spending levels are already soaring. Programmatic buying is lauded for its benefits, which include increased efficiency, more accurate targeting capabilities, and easy scalability. But it’s also rife with fraud. According to research from the Association of National Advertisers and WhiteOps, 23 percent of video ad views are actually from bots. This is simply not acceptable. As an increasing number of brands and agencies look to embrace video advertising, they’ll clamor for more stringent regulations and better protection against fraudulent traffic. They’ll also take a hard look at programmatic trading, the practice of buying media and then reselling it for profit. In the not-too-distant future, 2016 will be the year brands demand more transparency across the board. The writing is already on the wall. BrightRoll has begun cleaning up its traffic and taking steps to educate the market about the ubiquity of fraud. AppNexus, which has been a big player in programmatic trading, made huge strides this year by working to improve the quality of its inventory, limiting media arbitrage and increasing viewability. Perhaps predictably, it’s also shifting its focus toward video.   

Mobile media consolidation

Even with the growing amount of fraudulent mobile video traffic, there is still a pressing supply and demand issue. There’s simply not enough inventory to meet advertisers’ needs. We’re going to have to rethink our definition of “premium” and become more open to running video ads in-stream and alongside user-generated content, a change that’s already underway—just look at the buzz Snapchat’s video ad product is generating.
The increased demand for mobile video will continue to drive up prices for publishers, which is part of the reason why a growing number of companies are working to buy or create quality video content. Mobile media has already begun consolidating, as content distributors and content creators realize they’re more powerful together. Look at AOL’s acquisition of Adapt.TV, a programmatic video ad platform, and Vidible, a content syndication solution for publishers. (Expect to see an increase in the syndication of quality content as one solution to the challenge of meeting expanding demand quickly.) With these moves, AOL now has the audience, content, and technology needed to offer advertisers a full-service ad solution. And don’t forget, it’s owned by Verizon, which recently announced a plan to launch its own Hulu/Netflix-like app (Go90) for streaming mobile video, and also revealed that its focus is on mobile video.
RTL Group’s purchase of SpotXchange last year and Facebook’s acquisition of LiveRail, the third-largest online video advertising management platform, are also harbingers of industry-wide change. Facebook can now extend its video ad reach beyond its platform, and LiveRail is already working to improve the quality of its exchange by cutting out providers who don’t work directly with advertisers. If they manage to improve their supply and leverage Facebook’s in-depth data, the results will be what marketers’ dreams are made of: the ability to reach their target audience via quality mobile video traffic while gaining precise insight into what type of creative is resonating.
These types of intelligent mergers will continue as the industry works to reduce fraud, improve viewability, and better harness data. These changes will punish suppliers with less-than-stellar practices, but the net result will be an industry that’s more mature, regulated, and effective. Mobile video advertising will be a no-brainer investment.

Yahoo acquires BrightRoll for $640 million

Yahoo is acquiring video advertising company BrightRoll for $640 million in cash. Marissa Mayer announced the acquisition with a post on the official Yahoo blog Tuesday, where she said that BrightRoll will help Yahoo in its quest to replace traditional banner ads with “video… mobile, social, and native” advertising. Mayer said that BrightRoll is expected to generate more than $100 million in net revenue this year, and comScore lists Brightroll as the ad platform with the widest reach, serving ads to 52.4 percent of all U.S. internet users in September. (Disclosure: BrightRoll is backed by True Ventures, a venture capital firm that is an investor in the parent company of this blog, Giga Omni Media.)

Good news for Hulu Plus subscribers: Hulu CEO is considering running fewer ads

Think there are too many ads on Hulu Plus? You’re not alone: Hulu CEO Mike Hopkins is considering reducing the ad load on Hulu’s paid subscription tier, according to a New York Post report. Hulu has been showing users more than 80 ads per month, compared to 32 on YouTube, according to the Post. Of course, paying Netflix subscribers don’t have to endure any ads — but it’s unlikely Hulu would go that far any time soon: The service just launched in-app subscriptions for its iPhone app, making it even more dependent on advertising for paying users.

Video ads are coming to Spotify

Spotify just found another way to monetize the 30 million users of its free tier: The music service launched video ads across its mobile and desktop apps Monday, giving brands a way to insert either 15 or 30 second-long clips into its music stream. Advertisers who opt to pay more can also buy what the company calls a “sponsored session,” which gives users 30 minutes of uninterrupted listening if they watch an ad.

Here are 5 tools that might juice online video ads

Video remains the most promising ad format for publishers hoping to improve their ad returns. The industry is still in early stages but here are five winners of a contest to make video ads more interactive.