Mobile Video Continues to Make Gains

/ Aug 25, 2014


When it comes to mobile video, the common refrain has been that consumption far outweighs monetization. But the tides look to be turning, even if a lot of work still remains.

According to data recently released by FreeWheel, a video-ad tech company serving TV networks and digital video publishers alike, mobile — which we are defining as smartphones and tablets — accounted for 20% of all video ad views in the second quarter. Year over year, smartphone video ad views grew 93% while tablets increased 26%. (This data is based on ads delivered by FreeWheel on behalf of its clients, which generated 50 billion views in the first half of 2014.)

FreeWheel Ad Views by Device - Chart 6

What’s interesting is how smartphones and tablets are becoming functionally different with respect to the type of content viewers prefer on each device.

Unsurprisingly, smartphones are a goldmine for short-form videos. According to FreeWheel, 65% of smartphone ad views were on videos shorter than 20 minutes. Tablets, meanwhile, go the other way, with 63% of ad views happening on videos longer than 20 minutes. In simpler terms, smartphones are for “snacking,” while tablets are rapidly becoming another TV screen.

FreeWheel Ad Views by Content Duration -- Chart 8

Could this be an issue for digital-native video companies, most of which primarily offer short-form content?

FreeWheel’s data shows that long-form video ad view growth outstrips short- and mid-form, increasing 35% year-over-year versus 17%. It’s easy see to why: Long-form offers a viewing experience that resembles television, with multiple ad breaks in the middle. Content providers are taking advantage of this, with the average mid-roll break now spanning 3.7 ads and 98 seconds, up from 2.7 ads and 68 seconds in Q2 2013.

Short-form, understandably, accounts for 81% of all video ad views from digital-native video publishers, with mid-form coming in second at 11%.

Combine all these stats and it would suggest that unless digital-native publishers expand into long-form programming, mobile will be a tough nut to crack, right? Not necessarily.

“I think it’s an important distinction that smartphone and tablet are not necessarily created equal,” says Brian Dutt, director of advisory services at FreeWheel and author of the report. But that doesn’t mean videos on smartphones can’t be monetized. “If it’s premium content — professionally produced and created by leading publishers — I don’t think there will be a huge distinction between short and long.”

TV advertisers are generally more likely to start with long-form because it’s the same exact experience, Dutt adds. But eventually, as more buyers expand to digital, the types of content they buy against will diversify.

And FreeWheel has data to support that. In Q2, 41% of videos on smartphones were armed with pre-roll ads, an increase of 51% from last year. Comparatively, 47% of short-form videos on tablets had pre-rolls, a year-over-year growth of 32%.

FreeWheel Q2 2014 Report -- Chart 14

The type of creative could play a major role in the continued growth of mobile video advertising. Publishers have begun to tailor advertising experiences to the device, says Dutt. For instance, short-form publishers are 22% more likely to use 15-second spots on mobile than on OTT devices, which makes sense considering the type of content most people watch on each screen. Overall, 65% of ads on smartphones are 15 seconds long, while the split on tablets is an even 50/50, once again reflecting the different cases for each device when it comes to watching video.

FreeWheel Q2 2014 -- Chart 13

With its increased function as a private TV screen, the percentage of ad dollars going to tablets should only grow. Smartphones should also attract ad spend as advertisers get increasingly comfortable with spots on the device. After all, the data shows that people will sit through pre-rolls — completion rates on short-form and mid-form content stood at 73% and 82%, respectively.

FreeWheel’s data comes from the premium content providers it works with. But what about YouTube?

According to Tubular Labs, mobile accounts for 46% of global views on the world’s biggest video platform. Broken down further, video-capable phones have a 32% share of total YouTube viewership, while tablets command 14%. This data closely mirrors the statistic YouTube prefers to share publicly — that mobile is responsible 45% of global watch time on the platform.

For YouTube, the company, monetizing mobile is a pretty linear game. But for creators and networks on the platform, it’s a completely different story. Issues with YouTube’s ad-revenue split extend to mobile, which means content providers need to look beyond YouTube ads to monetize effectively.

The easiest way to do this on mobile is by having an app, which allows creators a direct path for mobile distribution and a number of monetization options.

“Beyond YouTube, your own app on the user’s phone or tablet is extremely valuable real estate,” says Frank Sinton, founder and CEO of Beachfront Media, which specializes in building apps for YouTube creators and digital content companies.

On apps, there are primarily three ways for creators to monetize: advertising (both display and pre-rolls), in-app purchases, and subscriptions. The extent to which each option is used depends on the creator and his or her audience, says Sinton. While advertising is common, in-app purchases and the gating of content via subscription depends on the strength of the app and audience.

Specialissues_logoREAD ALSO: Fan of this special issue? Take a few minutes and check out our others, which cover everything from music to comedy to the most important executives in the online video space.

Regardless of platform, though, perhaps the most important X factor in getting ad-spend and monetization to match consumption on mobile is measurement. If advertisers are comfortable with the platform, surely the dollars will follow.

Here, also, there’s room for optimism — thanks in large part to the advances made by Nielsen with its Online Campaign Ratings tool, which can now also measure on mobile. “The ability to start tracking things like audience demographics, and being able to verify the audience composition across devices” is crucial, says Dutt. “I think OCR will help move this along.”

Like digital video in general, mobile video is not “there” yet, but as the data and latest advances in the industry clearly suggest, even though audiences have beat advertisers to the punch in flocking to mobile, eventually the latter will catch up.

This article is part of VideoInk’s special issue on mobile video and Vine, “Video on the Go.” Come back all week as we highlight issues and stars of the mobile and social video space.

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