Mobile Video Advertising: The Profit And The Pain

Mobile video advertising spending is set to quadruple in the United States alone in the next three years, from $518 million in 2013 spending to almost $2.1 billion in 2016, according to eMarketer. However, this increasingly engaging set of consumer interactions could present significant challenges for the mobile network operators that have to carry this advertising traffic. After all, one short video advertisement represents the equivalent of 900 mobile banner ads in terms of bandwidth.

Autoplay video services, like those introduced by Vine and Instagram in which mobile videos automatically start running without any user interaction, can add unsolicited pressure on data traffic and, ultimately, jeopardize the consumer’s overall mobile experience. Likewise Apple recently announced that it is opening its iAd Workbench to anyone with an Apple ID, and will allow users who create mobile ads to start including video. These video ads will behave like interstitial online ads, which means that they will play full-screen without any sort of interaction or click by the user.

Currently, mobile ads usually do not launch videos unless a user explicitly makes a choice to do so by clicking on a banner. While everyone has found plenty of methods for training our collective gaze away from banner ads, it’s much more challenging to ignore a video that automatically plays in a social media stream or on a favorite mobile web site. Depending on how targeted and relevant the video is, this can be either a good or a not-so-good thing.

It’s not simply the operators that have a key stake in the ultimate success of mobile video advertising. Interstitial or autoplay video ads that buffer, stall or even crash a user’s viewing experience will only serve to damage, not promote, the brands in question. We’ve seen just how off-guard our mobile operator partners can be caught when something new, shiny and packed with bandwidth  -- like Instagram, Vine or autoplay video advertisements -- starts exploding across their networks. We’ve seen average video bitrates soar from 350-500kbps to 900-1100kbps in the space of six months.

This explosion of autoplay video is what gives rise to aggressive moves by operators to rapidly offload traffic to WiFi, to build out LTE network coverage and migrate customers to this network, and to deploy flexible mobile video optimization solutions that can reliably mitigate against left-field, over the top apps, services and bandwidth-busting advertising breakthroughs.

As mobile ads rapidly traverse from traditional “skyscrapers,” “buttons” and “banners” to these video ads, operators and advertisers alike must take note of their potential impact on the customer experience. If mobile video advertising is to reach its true potential on a global scale, the mobile video experience, free from stalling and buffering, must be a cornerstone of its success.

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