When it comes to digital advertising, 2019 is the year of mobile. Globally, for the first time ever, consumers will spend more time on the internet than they will spend watching television — and that growth is largely fueled by mobile usage.
Mobile offers advertisers a number of opportunities other channels do not: Mobile devices go where their users go, meaning that it’s possible to serve ads based on a user’s proximity to a store or restaurant. They are personal devices; consequently, users pay closer attention to mobile ads than traditional internet ads. Mobile devices are also interactive, allowing for capabilities like “click to purchase” and a wide variety of creative ad experiences. Marketers are seeing the value: In the first quarter of 2019, mobile ad spend grew 29% year over year.
Video is Driving Mobile Advertising Spend Increases
Mobile ads come in a variety of formats, but the one that has seen the most traction as of late is mobile video. According to eMarketer, mobile video ad spend will double by 2022, reaching nearly $25 billion. Pathmatics data shows that, year to date, seven of the top 10 advertisers by spend have invested in mobile video ads. Additionally, all 10 allocate part of their digital ad budgets to mobile display.
Year to date, Procter & Gamble has allocated nearly $10 million to mobile video. Creatives range from two-minute long ads featuring celebrities to six-second product videos
Mobile video ads come in many shapes and sizes. Vertical ads, popularized by SnapChat, embrace the vertical nature of the smartphone. Rewarded video ads give users the ability to opt to watch a video for a “reward,” such as in-game currency. Non-skippable videos require a user to watch an entire ad before moving on to content. Whatever the format, mobile video ads reportedly see click-through rates that are 7.5 times higher than in-app display ads.
Ad Platforms Push for Shorter Mobile Videos
As marketers increasingly invest in mobile video, ad platforms are attempting to guide them toward shorter, pithier content. YouTube recently unveiled a machine learning-based tool called Bumper Machine that automatically turns 90-second videos into six-second ads. However, marketers appear to be resisting the push, with the number of 30-second ads increasing 19% on the platform earlier this year and the number of six-second ads falling by 20%.
Similarly, Facebook has launched an initiative called Thumbstoppers, which seeks to “define the next era of storytelling in mobile advertising.” Participants have 10 seconds to tell a story that triggers positive change. In April, the social network reported that 93% of its $14.9 billion in ad revenue came from mobile ads, so it’s little wonder it is investing in defining new iterations of the category.
Mobile Ad Options Continue to Expand
Ad spend isn’t the only thing increasing in the mobile channel. The number of available ad options is also on the rise. In May, Google announced that it would be adding new mobile ad units to Maps, YouTube, and Discover, the company’s mobile app content feed. These new placements are designed to account for a “new consumer journey” that is now far from linear. Amazon is also testing video advertising for its mobile app that is set to be rolled out later this year.
More options mean more places for marketers to reach potential customers. A recent report from the Interactive Advertising Bureau (IAB) noted that mobile ad revenue has benefited overall from advancements in formats, placements, and single-click functionality to the tune of $69.9 billion dollars last year, and will continue to grow at a breakneck pace.
5G Could Be a Game Changer
Now, for a larger trend: This year and next year, AT&T, Verizon, T-Mobile, and Sprint will introduce 5G coverage in dozens of cities across the country. Mobile advertising in the U.S. will only improve with the rollout, which is paving the way for high resolution, streaming, and interactive mobile experiences.
Higher speeds and lower latency can only improve location and programmatic technology, as well as fuel creativity in the mobile ad space. With the median length of a mobile session only 28 seconds long and consumers preferring content that lasts 15 to 30 seconds, 5G is poised to help marketers deliver more engaging content faster than ever before.
William Merchan is a data science, marketing analytics, advertising technology and startup veteran. He currently serves as chief revenue officer at marketing intelligence company Pathmatics, where he is responsible for brand growth and awareness. Previously, William built products and grew teams at DataScience.com, MarketShare and Yahoo!. He holds a BS in Business from the University of California Berkeley and an MBA from the Kellogg School of Management at Northwestern.