Brief:
- Video continues to outpace all other mobile ad formats with a 90% jump in spending in Q3 2017 from the prior quarter, according to a Smaato study shared with Mobile Marketer. The effective cost per thousand impressions (eCPM) for mobile video was 4.1x higher on average than for static ad formats.
- In-app advertising was the driving force of worldwide mobile spending in Q3, making up 96% of global ad spending on Smaato's platform that saw 1.5 trillion impressions that quarter. A shift away from the mobile web toward in-app was seen globally, with in-app garnering at least 85% of mobile ad spending in each of the top 20 mobile ad markets worldwide.
- Advertisers paid the highest global eCPMs to reach millennials, the audience of younger adults that drove 79% of mobile ad spending worldwide. While Android devices had a 68% share of the mobile ad market, eCPMs for ad space on iOS devices were 30% higher than on Android, Smaato found.
Insight:
Smaato's study emphasizes the growing importance of video advertising on mobile platforms, even as users complain about the ads' intrusiveness. This is expecially true for marketers trying to reach millennials, who were the target of the vast majority of mobile ad spending in the quarter. Further growth for mobile video ads is possible, as video is predicted to grow to 75% of mobile traffic by 2023 — from 55% now — as people increasingly turn to their smartphones to watch news, entertainment and live-streamed content, Ericsson estimated in a report in November.
Consumers spend more than 80% of their smartphone usage time on mobile apps, helping to drive a shift in ad spending toward in-app placements and away from mobile websites. This shift also means publishers that sell ad space need to focus on ways to reach audiences with a compelling mobile app that's easy to navigate and adds some kind of value or convenience to its users, something that has been a challenge for a number of traditional news organizations so far.
As mobile video advertising continues to grow, platforms are looking to add inventory and formats. Facebook, which this year introduced mid-roll ads that appear in the middle of video content, plans to test pre-roll ads for some of its inventory in 2018 as a result of this trend toward mobile video, the social media giant said. Pre-roll ads will be limited to places where people proactively seek out content, Facebook said in a blog post. That means the ads will be tested on the Watch tab, where the social network highlights video content, but they won't show up automatically in the platform's core News Feed.
With the adoption of ad-blocking software growing increasingly common among users, brands will likely look to in-app ads to reach these prickly audiences. Last summer, Google added built-in settings to its Chrome Canary mobile browser, which the company uses as a test bed for the latest features, to block ads deemed intrusive. For desktop users, Google last week released a test version of its latest Chrome web browser that lets users mute autoplay videos that they find annoying.
