By Ron Dick, Founder and CEO, Cedato
It wasn’t long ago that users would scroll through videos, apps and social media on mobile (or other) devices, only to be confronted by pop-up ads that bounce around, or worse, take over a screen.
Well, the age of chronic pop-ups is dying. Publishers and advertisers, bitten by viewer backlash have been rethinking advertising strategies, formats and creative units. They’ve acknowledged the popularity of mobile and video, and along the way have rediscovered native advertising.
Native advertising in 2016 is replacing a significant portion of display ads and will continue to do so in the coming years. According to industry predictions, native ads are anticipated to more than double by 2018. In fact, data from BI Intelligence found that spending on native ads will grow to $21 billion in 2018 (Source: Business Insider Intelligence).
Much of the predicted change can be attributed to mobile and in particular, video viewing on mobile, across multiple devices in content streams. In the age of multiple screens where video is growing exponentially, audio-visual native ads are performing much better than any banner ever could.
Native ads have been drawing higher engagement rates than traditional banner ads particularly on mobile devices. Desktop native Click-Through-Rates (CTRs) averaged 0.15 percent, while native-mobile ads displayed CTRs over one percent, according to data from Polar Media Group and Celtra, respectively (Source: Business Insider Intelligence).
Native mobile video advertising performs particularly well because the format creates an opportunity for persuasive brand or product demonstrations within a user’s content flow without resorting to a hard sell. The mobile window scroll, with native video seamlessly woven into the content stream, becomes a fluent storytelling experience.
On the publisher side, video advertising has been responsible for the highest source of revenue. With video ad views growing at a 32 percent rate year-over-year (IAB/FreeWheel’s Video Monetization Report), publishers recognized this medium as a highly valuable way to monetize online traffic.
Until recently, the path to a seamless cross-screen native video experience has been thwarted with supply-and-demand constraints, as well as technological barriers. Publishers in the past were limited by their available supply of video content. Similar to TV advertising, digital video advertising was linearly streamed before, during and after a video segment, interrupting rather than engaging. But there just wasn’t enough video content to carry the sky-rocketing advertising inventory.
Such demand has led publishers and advertisers came up with a creative solution for the supply-demand disparity: video ad placement inside content feeds. With Facebook and Twitter incorporating this functionality and therefore conditioning viewers to accept auto-play video as the new norm, the rest of the industry has followed suit.
The next logical step was the convergence of the most sought after medium – video, with the preferred advertising format – native, within the content stream. The math was there. Demand was met. Publishers and advertisers were thrilled, but the technology didn’t fully deliver. Agonizing latency issues, mobile and cross-screen playback glitches and low quality ads resulted in major content loading delays and a highly compromised viewer experience. Frustrated with slow loading content and intrusive ads, viewers were quick to abandon sites. The kickback reactions shattered the content monetization model, leaving publishers and advertisers alarmed.
Video technology companies, seeing an opportunity, have begun to provide advertisers and publishers with native video building blocks that overcome latency and fill rate issues. The recent wave of such technologies has given birth to a new native video that can break away from legacy silos, separated by mobile devices, desktop and even TV, and immerse consumers into a fluid uninterrupted viewing experience across multiple screens.
The new native video plays proportionately sized ads that are perfectly adapted to the viewer’s screen, device and preferences. It plays highly creative video stories based on user cues. Existing static images, placements and even text can come alive with interactive and branded video. A puzzle of stories forms a sequence of natural engagement, bounded only by creative imagination. Brands and advertisers can now deliver compelling and powerful content at scale.
About the Author
Ron Dick is founder and CEO of Cedato, which powers digital video transactions with an open platform for creating native video ads. Ron will be speaking at Advertising Week Europe on a panel about cross-screen video, alongside Google, Centaur Media, Millward Brown and Viacom.