From on-demand video to live-streaming and widespread usage on mobile devices, the sheer scale of growth in video consumption has been breath-taking. This has created a massive opportunity for marketers and their technology partners to deliver compelling and engaging content to their audiences in a variety of video advertising formats. This post considers some of the implications that the device itself has on video and video advertising.
Just How Big is the Video Consumption Trend?
- In 2021, the average person spent up to 100 minutes per day consuming video content
- Global video based social platform TikTok reached 1 billion users in September 2021
- There are an estimated 2.2 billion users on YouTube (48% of all Internet users in the world)
- Over-the-top (OTT) subscriptions increased by 11% in 2020 with total OTT media revenue expected to reach over $210 billion by 2026
Not only is video consumption big, but major players are doubling down on their investments in long-form video:
What’s Fueling the Video Consumption Revolution?
Some of the reasons for this explosive growth include:
The COVID-19 Pandemic
OTT’s 11% membership increase during 2020 was no coincidence – the COVID-19 pandemic resulted in entire countries being locked down and people confined indoors. This had a direct impact on the massive increase in streaming service subscriptions to Netflix, Disney+, Hulu, etc. as people spent more time consuming content on their home devices.
The Smartphone Revolution
When the first 4GB iPhone was released in 2007 at a retail price of $499, it was the minority of innovators and early adopters who embraced the trend of owning a smartphone. Now in 2022, almost 85% of the entire world’s population owns a smartphone and there are more than 4.3 billion active mobile Internet users worldwide.
Improved Cellular Networks
Since the emergence of 3G, 4G and now 5G network bandwidth, availability has increased on cellular networks which has enabled devices to stream more content, leading to a significant increase in video consumption.
Cheaper Data Plans
Data plans have become more affordable in most markets and what was the preserve of the business community in the early 2000s is now accessible to all. For at little as $10 per month, users can access several GBs worth of Internet data.
Availability of Video
Video platforms for sharing and consuming video have mushroomed along with their audiences - platforms like TikTok, YouTube, Vimeo and Twitch have monthly audiences in the hundreds of millions.
Video Advertising
Programmatic video advertising is ramping in line with this growth in video consumption; between 2020 and 2021, total digital video ad revenues (inclusive of CTV/OTT) increased by 51%. Video advertising spend has also now eclipsed spend on banner ads for the first time, according to research of IAB and PwC in the UK. Whichever way you look at it, video is extremely lucrative, and much of this advertising is being served on programmatic networks.
The Video Advertising Opportunity
There is ample evidence that engagement with the video format is high; higher engagement rates and the continued shift away from linear TV (especially of younger demographics) has led to an increase in mobile video ad spending. Marketing budgets are following this shift to digital video where targeting and completion rates can be higher:
66% of consumers prefer watching a video about a product rather than reading about it. Similarly, 54% of consumers would like to see more video content from companies this year. Email click-through rates can increase by 96% and social videos can generate up to 1200% more shares than text and images combined. However, the undoubted potential that video offers to marketers and advertisers trying to reach their audiences can only be attained by delivering frictionless video delivery, especially on mobile channels.
Getting Video Advertising right
For video advertising technology players, getting it right on mobile requires accurate knowledge of the device you’re marketing to. Given the additional costs of serving video in terms of bandwidth and the actual production costs of the content, videos should only be served to devices that can play them. In terms of technical delivery, you need to know if the device is a mobile, tablet or desktop class device. Other device required capabilities include screen size, resolution, OS and OS version and multimedia capabilities in order to guarantee that the creative will work from a technical perspective and is contextually targeted for mobile devices.
You must also ensure that the video is appropriately optimized for the context and connectivity that the user is experiencing when they engage with it. Users connecting with a lower bandwidth will be harder to reach if you are serving a HD resolution video over a narrow pipe. But it’s not just the connectivity that’s the issue; less powerful devices may struggle even with good connectivity. User Experience is paramount: how many times have you abandoned website because of a continuous loading spinner? Industry averages for load times of video ads on mobile are over 5 seconds. The resulting abandonment rates equate to a lot of lost opportunities and revenue.
Key content delivery decisions
Key content delivery decisions can be made in real time if you can accurately determine the device via server-side device detection. This approach works by parsing the user agent in the web environment or the make/model string in the native app environment to identify the device and return any number of device characteristics that you might need to inform your content delivery and targeting strategy. Of course, this needs to be done in real-time with high accuracy rates. Many specialist video advertising players use this technique to give their platforms a competitive advantage in terms of reach as well as targeting ability. Read more about how leading video ad platforms like SpotX and Tremor Video are doing this here and here.
Getting video advertising right requires a combination of great user experience, device targeting, instant loading as well as the all-important ad creative. The best ad platforms will be able to offer the kind of sophisticated device targeting on mobile to both web and native app channels.