Everywhere you look things seem to be shifting to video –  from the iPhone’s live photo feature to Facebook’s integration of video messaging. There’s no disputing it – video is the reigning medium, most recently in the world of mobile.

So much so that in 2015 it broke new records, as the average daily time spent watching digital video on smartphones in the US surpassed desktop time. By 2017, this figure is expected to double.

Great expectations

History dictates that advertising always follows the audience. It’s no surprise then that video has become hot investment for mobile ad spending. In fact, the smartphone ecosystem has exploded with video advertising more so than any other digital advertising format in the US, with video ad revenue anticipated to more than quintuple over the next five years.

And it makes sense. If a picture is worth a thousand words, imagine how that translates for video. But it’s beyond even this age-old psychology of marketing. Today’s highly social and oversaturated audience actually craves and needs a more interactive digital experience to remain engaged. Better yet, they expect it.

The opportunities are vast and promising to be sure, yet too often missed. Despite video ad’s gaining influence across all vectors, businesses big and small continue to overlook key advantages that the popular medium has to offer, be it innovative user engagement tactics or general enhancements in advertisement lifetime value (LTV).

If properly harnessed, video advertising generates significant value for mobile and will continue to influence the present and future of its landscape.

Quality is key

Video should be the format of choice for mobile advertisers. Numbers don’t lie and, as of the most recent statistics, they indicate that mobile video ads drive an overall higher-quality user than those of competing mediums.

Increasing numbers of viewers is useless if they are not ‘high-quality.’ Defining what exactly this term means depends on individual industries, but there are a few key metrics that undeniably characterise a high-quality user, the most prized of which is a higher user engagement ratio.

Everyone wants it, but few truly get it. A quality user is someone engaging  with a product or service frequently, actually using the app, entertained by the experience, someone who completes certain milestones, such as tutorials, perhaps reaches advanced levels, and who shares his or her progress with friends and, ideally, performs an in-app purchase.

Mobile video ads embrace this far better than any other competing advertising format. In fact, five times better than standard banner ads. That’s a landslide victory for video already, but it barely scratches the surface of the value this type of ad has to offer.

Engage and monetise

Let’s take a look at rewarded video advertisements in the gaming industry. Recognising the potential goldmine that is video, advertisers and developers have collaborated to develop new and creative means of leveraging this lucrative ad format with rewarded video at the forefront of this undertaking. Welcome to rewarded video ads – short, non-skippable clips that users actually opt into in order to receive a reward pertinent to the application or website they are using, such as free coins to continue playing.

Rewarded video’s rocketing popularity makes sense given its ability to meet two key demands of today’s highly social audience – interactivity and consumer control. The gaming industry often executes this seamlessly by prompting users to view a rewarded video ad that has been integrated as a flowing part of the content experience.

Gaming may be doing it best, but it’s not the only space where the trend thrives. It can be implemented across all vectors looking to maximise their user engagement— and ultimately monetisation— in the mobile video landscape. What’s more, the emerging success of rewarded video is but one of countless possibilities for creative approaches to capitalising on the powerhouse that is video.

Make it flow

The key to video’s success on mobile is its unique ability to translate a non-intrusive advertising experience that promotes interaction with the content users are expecting to consume. It’s most successful when advertisers and developers design features within an app in a way to fluently pair them with a video ad. This makes the experience both naturally engaging and interactive to the user; enhancing the overall quality of content, not interrupting it.

Such practices can not only elevate the level of engagement and quality of a viewer, but they are proven to spur greater user retention rates — another perk of video ads. This reasoning is twofold.

Not only can video deliver a more interactive and higher-quality digital experience craved by today’s consumers, but – through demos and sneak-peak clips – it can also convey a more accurate picture of the application the user may or may not download.

According to ComScore, 64% of consumers are more likely to buy a product after watching a video about it. A user who is more informed and aware of what exactly he or she is signing up for is in turn more likely to have a positive reaction to a particular application, which keeps them coming back for more.

Everyone’s a winner

If you do the math, the combination of a more engaged and a longer-retained user base equals a total improvement in advertising LTV. But video is the gift that keeps on giving. Publishers leveraging the open-ended possibilities of mobile video are also generating a higher-effective cost per thousand impressions, or eCPM.

The logic here is simple: while the average mobile ad eCPM declines for a cohort of users, video bypasses this downward trend— if done well, of course— through its ability to provide a more engaging and dynamic content experience that keeps users clicking.

Video’s exponential payout is even further accelerated when paired with a performance marketing strategy capable of boosting the ad’s engagement potential to completed user conversions. Getting users to click on ads is great, but ultimately it’s an empty gesture akin to window shopping. This is particularly true when each click costs the client a hefty sum. Adding a performance marketing strategy into the video mix ensures the most economical and efficient advertising result – you pay only when your video ad achieves the desired result.

The mobile video industry continues to be a win-win investment for everyone involved. Consumers enjoy an improved content experience; publishers, developers and advertisers reap the rewards of top-notch attention metrics. With mobile video, the door is open to ever-evolving opportunities for creativity and connectivity to truly engage in an increasingly attention deficient world.