As revealed by the most recent report from IAB and PwC, the annual growth of ad spend on video is increasing, particularly on mobile. AppLift’s CEO Tim Koschella explains what the growth of mobile video means for the industry and how marketers can harness the trend.

When is comes to advertising, is there an incentive for brands to be utilising mobile video?

Tim Koschella: As for all new channels and ad formats, I’d encourage brands to allocate some budget to systematically test campaigns on mobile video. Most of the mobile interstitial video ads have so-called end cards (aka ‘companion banners’). This is basically an interstitial ad shown after the video view is completed. It provides excellent ad real estate for placing a click-out link with a clear call to action and summary of the advertised product.

The major difference between these video ads and more classical forms of video advertising (like pre-, mid- and post-rolls) is that there is a dedicated slot to place a call-to-action and as a result click-thru rates we are seeing are much higher.

Also, a special form of mobile video interstitial ads is opt-in ads where users receive a virtual reward for watching a video. These so-called ‘rewarded video ads’ are mostly integrated within mobile game apps or other apps that feature a virtual currency ecosystem – think dating apps, for example.

Since the user receives a small reward for watching the video, the ad experience is designed to be non-skippable, which results in extremely high video completion rates. Advertisers with a complex message to deliver to the user can leverage this opportunity by creating 15 or 30-second video ads, which are designed to convey their message in a structured storyline.

While brands are just starting to explore mobile, do you have any tips for best strategies?

TK: First, understand the type of video ad inventory that exists on the market and pick the formats most useful for your needs. Mobile video formats are not alike and it’s key to distinguish between them.

Pre-, mid- and post-roll are very similar to the desktop video. Ads are placed before, in between or after video content. Usually, this inventory is quite expensive because it is most similar to TV ads and desktop video hence some buyers choose it as an extension to their desktop campaigns without a mobile-first strategy in mind.

Native video, on the other hand, is the equivalent of ‘outstream videos’ on desktop. The video player is embedded directly within a feed in an app (usually vertically scrollable feeds like in a news or social networking app) or in mobile web. Video length options are typically between 15 to 120 seconds, skippable and non-skippable.

Finally, there’s interstitial video which is fullscreen, usually 100% viewable and mostly with pre-cached ads that allow for HD video to be played without latency. This is a mobile-only format with no equivalent existing in the desktop world. This is why most brand buyers take some time to fully understand and deploy budgets to this inventory type. It can be the most effective of all – if strategised well – but buyers need to understand the differences, such as video length is from 15 to 120 seconds, depending on the specific placements. VAST is the defacto standard, though some inventory can also be purchased through MRAID [mobile rich ad interface definitions] only. Placements can be skippable or non-skippable, which has a huge impact on video completion rates. Finally, there are video ads with and without end cards/companion banners.

One you’ve fully understood the landscape, start testing systematically. Set up the right creative and targeting strategy in line with the video format purchased. RTB [real-time bidding] is an excellent way to get started because it allows to systematically test, evaluate, iterate and optimise without large minimum spends per campaign and placement. Once brands understood their sweet spot, they can roll out a more scaled buying strategy, including direct deals with large publishers that work for their campaign goals.

Have there been any surprising trends in the past few years in mobile advertising?

TK: Programmatic buying is the major trend we are seeing across mobile video, as the video publisher and mobile landscape continue to evolve and grow.

Companies such as Google and Facebook, who own and operate their own video inventory, do not reflect many of the players within this landscape. Many utilise in-app mobile video inventory. With that in mind, a format for desktop does not exist. With mobile advertising as an extremely powerful format, it has become more prominent for both branding and performance, since full-screen interstitials within games are constantly pre-cached and 100% in view, making mobile videos play seamlessly even on the slowest internet speeds.

What do you think the next big thing in this space will be?

TK: Experimentation with the various mobile formats accessible in the ecosystem will bring both brand and performance advertisers multiple benefits as more mobile inventory becomes open to RTB buyers.

Due to mobile-first exchanges developing their technologies to enable new ad formats, a few ‘made to order’ ad networks have opened inventory to programmatic buying, creating a massive mobile movement as this enablement via RTB expands.

By empowering advertisers, RTB gives more control over where, when and at what price they are buying inventory, which allows for a more strategic buying process that includes ad sequencing, frequency capping, and using first- and third-party data to inform the buying decision.

Could you tell us more about the relationship between mobile video and programmatic?

TK: Video is shifting programmatic. This became very clear in 2016 but that does not mean big changes aren’t on the horizon. This year, we’ll see mobile-first exchanges investing in technology which enables both rewarded and unrewarded accessibility on RTB.

More and more mobile video ad networks will open up their inventory to RTB partnerships, utilising tools made on their own or through partnerships with exchange technology vendors. Publishers will also learn to adopt these new assistive technologies.

That being said, all of this will take time as both the user and developer must constantly make updates in sync with one another as new technologies within the app will not become apparent until the user updates to the latest app version. In short, these technology advances need time to gain wide adoption at scale.