While TV remains a trusted mass-market media vehicle with the broadest reach, the rise of video consumption on mobile devices has presented new opportunities for marketers to influence audience behaviors. However, this shift in consumer media viewing habits has also made it even more difficult for marketers and agencies to connect, engage, and convert these harder-to-reach audiences.
As a result, brand marketers are considering unprecedented media investments to accommodate the evolution to multi-screen viewing. Understanding this shift is important to ensuring brand advertising budgets generate the maximum return on investment for advertisers and agencies.
Recently, BrightRoll commissioned Nielsen for a first-of-its-kind study, which examined media efficiency across TV and mobile video. The study examined how US brand marketers could put their media spend to work more effectively through a combination of TV and mobile video advertising. Because of mobile video’s strong growth in the UK and across Europe, there are a number of similar implications for these marketers.
In the US, TV penetration is unmatched, as more than 95 percent of American households own a TV. TV ad budgets are the largest for any media segment with a forecast $68 billion spend in 2014 in the U.S., according to eMarketer.
While TV remains the “first screen,” video consumption on mobile devices is increasing at record levels. In fact, CMO.com reported that online video consumption across mobile devices increased 73 percent for smartphone and 42 percent for tables (Q1 2013 vs. Q1 2014).
The situation is even more pronounced in the UK and across Europe. A recent article from eMarketer, citing data compiled from a survey conducted by FreeWheel, revealed that of all the video ads watched by people living in the UK in Q2 of this year, 17 percent were delivered to smartphones and 15 percent to tablets. During the same time period in the US, only 7 percent of tablet and 13 percent of smartphone users watched video ads on these devices.
Furthermore, although TV is expected to take the lions share of ad spend in 2014 (around 26 percent) eMarketer states that it expects mobile ad spending in the UK to surge 90 percent to £2.26bn in 2014 – 15 percent of total ad spend.
The same report goes on to predict that in 2015, mobile will overtake all of print, including both newspaper and magazines; in 2016 it will overtake television; and in 2017 mobile will become the single biggest ad channel in the UK market.
Various reports paint a similar picture across the rest of Europe. According to IAB Europe, online video advertising grew by 45.4% in 2013, to nearly €1.19bn – the first time in Europe that it had crossed the €1billion mark.
Forrester Research's “Western European Online Display Advertising Forecast” predicts that online display advertising spend will rise at a CAGR of 10.3% between 2014 and 2019, jumping from €7.3 billion to €11.9billion. The research firm cites two key factors have as accounting for the double-digit growth rate: mobile and video.
The dramatic shift in consumer behaviour is, understandably, encouraging many brand a their media buying strategies to put their message where target audiences are spending time.
The BrightRoll study showcases that brand marketers can put their media dollars to work more effectively and better reach cross-screen audiences through a combination of TV and mobile video advertising. The goal of the study was to determine how the pairing of mobile video and TV advertising could build incremental reach for brand advertisers and improve cost efficiency.
Findings from the study indicate that a marketer’s reach for a desired target consumer may rise as much as 12.7 percent (in the CPG vertical) when TV advertising is aligned with video advertising served to mobile devices. Furthermore, as video consumption on mobile devices continues to accelerate, complementing TV buys with an incremental investment in a mobile video advertising strategy will reduce brand marketers' incremental cost per target rating point (TRP). TRP’s could drop by as much as 13.7 percent when 15 percent of budgets are deployed on mobile video.
Nielsen estimates that for some marketing campaigns, brands that want to capture more than 60 percent of its target audience often spend more than $707,000 per reach point (i.e., cost per point). Further, it’s not surprising for those same brands can spend $1,389,000 or more to acquire one incremental reach point after 70 percent of consumers have been reached. This dramatic increase in incremental cost per point indicates that these marketers often hit a point of diminishing returns once they hit the 60 and 70 percent thresholds.
The significant shift and fragmentation of consumer media consumption has created opportunity for Pan-European marketers. By complementing TV with mobile video advertising, brands and agencies can extend their reach, connect with consumers wherever they are watching video, and pay less for those connections.
The full report – Mobile Video Advertising Strengthens TV Media Investments – can be downloaded at info.brightroll.com/mobilevideo