5 video advertising trends that will change your business

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This post was written by Jim O’Neill, Strategic Media Consultant - US West and Principal Analyst, Ooyala.

Ooyala’s Q4 2016 Global Video Index report finds that changes in video advertising promise to reframe how both publishers and marketers approach their respective businesses in the year ahead.

Mobile continues its drive toward becoming the number one way to watch video. In Q4, mobile devices saw 54% of all video starts, up from just over 52% in Q3.  A recent report from ZenithOptimedia said that, globally, consumers spent nearly 20 minutes a day watching online videos on mobile devices, four minutes more than they watched on desktop computers and smart TV sets in 2016. That’s up nearly 40% from a year earlier, and ZenithOptimedia forecasts mobile video viewing will grow 33% in 2017 and 27% in 2018.

PwC’s Global Entertainment and Media Outlook indicates that growth will fuel equally rapid expansion for mobile advertising, making it the fastest-growing ad channel globally; U.S. spending alone is expected to see CAGR of 26.5% through 2020. By some measures, brands spent $17.5 billion on online video ads in 2015, and eMarketer, for example, forecasts that spending will increase by double digits through 2020.

Here are five more trends we’re seeing that will impact video advertising going forward:

• Buyers have started to implement third-party vendors who track and report data on the impressions around IVT (Invalid traffic) and fraud. It appears this is the newest effort to deal with low-quality traffic, meaning agencies and buyers will have to step up their game in reporting and in finding better and clean inventory. It will have a huge market impact, as publishers need to adapt their inventory and make it clean for all buyers. Complicating matters: Each DSP uses a different third-party data vendor and not all have similar data.
• An increasing move away from longer, traditional pre-roll ads, with agencies going for shorter ads in the five- to 15-second range. Geico and the Martin Agency, for example, created a series of ads that – literally – are crushed from full-length to 15 seconds as a viewer watches, saying they recognize that pre-rolls aren’t always popular with viewers and decided to at least make them entertaining.
• As longer-form content increasingly is being watched on smartphones, mid-roll ad impressions are also migrating there, particularly for publisher platforms. Our Global Video Index report found that in Q3, PCs owned mid-roll impressions with a 68% share (compared to 30% for smartphones and 2% for tablets). In Q4, smartphones took 18 points from PC mid-roll impressions, resulting in a relative dead heat between PCs (49.9%) and smartphones (48.2). Tablets remained at roughly 2%. This change, of course, correlates with the adoption of mobile videos by consumers.
• If you’re an ad-supported platform, or if you’re considering it, programmatic is almost certainly a (big) part of your future, as it continues to gain ground and see increased spending across all regions. eMarketer expects U.S. programmatic to grow at a compound annual growth rate exceeding 143% through 2018 as the technology’s benefits, including ease of transactions and its ability to target audiences, become better known.
• Header bidding will continue to catch fire. Even Facebook has entered the fray. But premium content providers take note: Header bidding is a display-rooted solution never built or intended for video —after all, there's no header in a video player. And while, technically you can do header bidding for video, there are concerns specifically for premium content providers delivering ad-supported, long-form content. Those experiences should be curated and tailored to the audience rather than exposed to open bids where ad clashing and off-brand messages may occur.

Consumers are willing, sometimes grudgingly, to accept advertising in exchange for entertainment. The key to maximizing your video monetization will be to optimize their user experience and not frustrate them with failed delivery, a challenging user interface or content that’s hard to uncover.

And, as you begin to plan your future strategy, make sure it’s a flexible one because there’s little doubt that there are more game-changing video advertising shifts ahead.

For more insights, download Ooyala’s Q4 2016 Global Video Index.

This post is sponsored by Ooyala. | Content is written and provided by Ooyala.