In Blog, Data, E-Commerce, Industry News, M-commerce

As we increasingly absorb the internet into our everyday lives, brands are naturally turning to digital media more and more to target their audience. As a result, digital ad spend is soaring and will continue to soar into the new year.

But what digital medium do we expect to drive this growth in 2017?

Mobile video advertising.

 

Why will 2017 be the year of mobile video advertising?

Consumers internet habits have drastically changed over the past 5 years. From an overriding reliance on desktop, increasing numbers of consumers are now turning to their mobile devices to access the internet. And with an expected 2.38 billion smartphone users worldwide by 2017, the potential number of mobile internet users is huge.

This growth in mobile internet usage has largely been fueled by an improvement in mobile technology. This is accompanied by a decrease in device costs, encapsulated in June 2016 when the cheapest ever smartphone was launched, costing less than $5. Improved mobile network access has also driven this as mobile operators decrease internet bundle prices and improve signal, particularly in rural areas. These developments are only set to continue into 2017, and so drive mobile internet usage on.

And where the viewers go, advertisers go. In 2013, worldwide mobile internet ad spending made up only 16% of digital ad spending. By 2017, this figure will stand at a whopping 59.4% – an almost 430% increase in a mere four years.

 

But why video, you ask? Why will mobile video advertising boom in 2017, rather than other types of mobile advertising?

It’s impossible to pin this down to one major cause, but rather on a multitude of factors coming together:

 

1.  Video production is becoming increasingly accessible

In today’s age, taking and making videos is no longer the profession of a few industry experts. The advancement of technology has democratized video production, allowing almost anyone to create a video, even on smartphones. As a result, video uploads are growing at an unprecedented rate. In 2016, an average of 300 hours of video were uploaded to YouTube every minute, and this will surely rise as we enter 2017.

With so much more video content online, this paves the way for video ad inventory to boom, running video ads alongside the original video content – whether pre, mid or post-roll. And with growth in inventory, comes a drop in price…

 

2.  Video advertising inventory is increasing – and reducing in price

Many advertisers have previously held back from utilizing video ads because of its relatively high price compared to the likes of display ads. This has primarily been caused by a lack of premium inventory, with demand surpassing supply.

However, video ad inventory is slowly but surely increasing – and we expect 2017 to be the year that really sees this change. A study on behalf of Teads in 2015 surveyed 529 advertiser decision-makers globally, and 70% said they planned to increase video budgets over the next two years.

With this increase in inventory, the price of video advertising will therefore drop. This will allow more businesses, and particularly smaller businesses, to enter the video advertising industry and reap its great benefits…

 

3.  Video advertising ROI can be great

When done well, the potential ROI on video advertising can be higher than any other advertising format. In 2016, YouTube claimed that at current budgets, online video delivers 50% higher ROI than TV advertising. As for digital ads, a study by DoubleClick found that video ads have a click-through rate (CTR) of 1.84% – higher than all other digital ad formats.

With such high ROI being increasingly seen throughout the industry, this is sure to tempt more advertisers to get involved with video advertising, and particularly on mobile, in the coming year.

 

As mobile internet usage continues to grow, coupled with the imminent boom in video ads, it seems natural for the two to come together and for mobile video advertising to take off in 2017. Watch this space.

To find out more about the digital world, take a look at our Resources section below:

 

A version of this post originally appeared on our UK site written by Kate Rogerson.

Recommended Posts

Leave a Comment

Contact Us

Get in touch to find out more about how we can help you improve your website's performance.

Not readable? Change text.

Start typing and press Enter to search