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Video is killer app for mobile advertising

Video advertising has proved it can move products and heighten brand awareness in measurable ways, so it will be an integral part of the mobile medium going forward, according to industry experts.

Although mobile video advertising has been in the wings for some time, it now finally feels like it is becoming more of a reality. The rise of smartphones and new platforms like the iPad are moving mobile video forward.

?It is evident from our customer demand that the iPad will indeed be an important driver of mobile video advertising,? said Xavier Facon, chief technology officer at Crisp Wireless, New York.

?The HTML5 video support is mature on all mobile devices sold by Apple, but it is particularly well implemented on the iPad, because it is easy to embed the video window in other content and there are API?s to control and track the events related to the video play,? he said.  

IPad and similar devices are expected to drive a significant growth for ads that embed video.

On smartphone devices, the click-to-video ad unit will be increasingly used because it is a great rich-media ad unit for mobile.

Already brands are using mobile video.

PepsiCo drove awareness and participation in its "Pepsi: The Game" program via a mobile video campaign (see story).

During Super Bowl XLIV, NFL Players ran a multichannel campaign featuring mobile video to create awareness and interest in the NFL Players Association and its players out of uniform (see story).

In January, in-application mobile video ads from Coca-Cola Co.?s Coke Zero, Miller Brewing Co.?s Miller Lite and Warner Bros. Entertainment?s New Line Cinema outperformed their online counterparts (see story).

BMW was able to generate test drives through a mobile video advertising campaign (see story).

With more advertisers interested in mobile video and seeing great results, it is logical that there will be more brands moving into the space.

?Video is not such an attractive option for direct and performance advertisers ? the type of advertisers that have been making up the vast majority of campaigns in the last few years,? Mr. Facon said.

?I expect that the trend to support HTML5 video on mobile handsets is improving the efficiency of launching mobile video campaigns and the cost will continue to go down,? he said. ?Eventually a CPM-based model for mobile video ads will be workable on the mobile Web.

?In apps, premium content providers will continue to sell sponsorship advertising that includes mobile video ads.?

Expect publishers? print advertisers to move to mobile with compelling, interactive and full-page ads that embed video.

According to Paran Johar, New York-based chief marketing officer of Jumptap, mobile video revenue estimates are $40 million for 2010.

There are currently three main types of video:

1. Click-to-video or tap-to-video ? These are ads that ask consumers to click or tap on a banner and when they do, the video automatically plays.

2. Video interstitial ? Rich-media interstitial ads with video embedded in it. The user need not click on the ad to be routed to the video.

3. InStream video ? There are ads that run pre-, post- and mid-roll within video content on, say, a media brand?s site.

?As publishers continue to support video advertising and SDKs [software developer kits] are deployed with broader video capabilities, this will be another area for advertisers to engage with their consumers,? said Marcus Startzel, senior vice president of sales at Millennial Media, Baltimore, MD.

?That being said, this is still a smartphone and connected device play, so there is limited reach regardless,? he said. ?But as 4G expands, and processor speed increases, both video and gaming have a great future.?

Mobile video is in its early stages but industry experts all agree that it promises to be an important next step in the evolution of mobile. 

Given the personal nature of the device and the dramatic shift of time spent on it, the executives expect a rapid adoption of mobile video.

Already, there is an astounding increase in mobile video consumption.

Mobile video drivers
Mr. Johar agrees that the iPad will drive mobile video forward out of experimental campaigns and into the mainstream.

?The iPad screen size makes viewing a much more pleasant experience than on a traditional handset and the form factor, which plays nicely to engaging a consumer, should help drive video adoption,? Mr. Johar said.    

Dave Gwozdz, CEO of Mojiva, New York, said that mobile video advertising is now part of most advertising strategy discussions.

However, that does not mean that all marketers are ready.

Mr. Gwozdz stressed that marketers are beginning to think about it and want to check on vendor preparedness and ability to deliver if they decide to produce the video units.

What used to be a very expensive way to advertise is now reasonably cost-effective as well, according to Mr. Facon.

Over the past year prices have been dropping. 

?I think the reason is that more devices support mobile video and they are now more likely to support a common video code like H.264/HTML5, which can be supported by the companies who power mobile video on the desktop Web,? Mr. Facon said.

?It would surprise me if any serious video advertising platform has not started supporting HTML5 video in addition to the traditional Flash video,? he said.

The ?all you can eat? mobile video packages are driving the number of active viewers of video on the mobile Web. The average subscription cost of mobile video is also down.

However, there are still many consumers ? almost 50 percent ? who walk around with devices that do not even support video, per Mr. Facon.

?The iPad will be one of the connected devices that will continue to propel mobile video advertising, but there are numerous other platforms that utilize video in engaging ways today?platforms such as Flo TV, the iPod touch and the Sony PSP,? Mr. Startzel said. 

?Also, many Android handsets like the HTC Incredible and the upcoming Evo on the Sprint 4G network will continue to drive more consumption due to an increase in processing capacity and network speeds,? he said.

?As 4G and WiMax spread, so will video.?

According to Flo TV, an average user watches 25-30 minutes of mobile television on the Flo service via AT&T and Verizon.

Crisp Wireless? Mr. Facon said that that a lot of clients are asking for mobile video advertising options, especially on the iPad.

In fact, most clients that are interested in advertising on the iPad are also interested in including video in the ad units.

According to Matthew Poepsel, vice president of performance strategies at Gomez, Lexington, MA, whether the iPad becomes a significant driver of mobile video advertising will depend on its rate of end-user adoption, as well as how entire Web sites perform on the device.

Devices like the iPad can affect the way content appears and functions, which impacts the end-user's Web experience.

?As a latency-sensitive application, online video leaves very little margin for error where performance is concerned; it must be reliable and it must download fast,? Mr. Poepsel said.

?Mobile video advertisements are directly tied to your brand, so poor performance presents a major liability that may dissuade businesses from pursuing them altogether,? he said.

IPad sales are exploding at an astounding rate. Apple announced it sold one million iPad units after only 28 days on the market.

In addition, Gomez?s preliminary iPad performance data showed iPads delivering stronger Web performance than Netbooks on the most popular Web sites.  If these two trends continue, those considering mobile video advertising initiatives may find the incentives they need to forge ahead with greater confidence.

Best practices
The quality of the video needs to be appropriately encoded for the type of Internet connection it is on. 

?It would be a shame to have poor-quality video on the WiFi-connected iPad because it can handle instant HD video,? Mr. Facon said. ?On the other hand, it is also unacceptable to have long video load times when connected via 3G.? 

There have been many technical best practices for mobile video that were applied across devices because the devices were so limited.

Mr. Facon said it is important not to stick with these strict limitations when you have a device like the iPad. 

Not all devices are made equal and it is important to leverage the capabilities of the device.

Mobile video commercials are ideally made-for-mobile versions of commercials. Fast-moving action, small text, dark shots are all better avoided in mobile video.

?You?ve got to ensure strong performance for mobile video advertisements in order to avoid reputation-damaging performance lapses and make your investments worthwhile,? Mr. Poepsel said.

?The key to doing this is to adopt an ?outside-in? point of view to get a true understanding of performance from an end-user perspective,? he said. ?This enables you to determine which end-users may be experiencing a performance degradation and then trace back across a complex set of variables in the Web application delivery chain ? ISPs, CDNs, carriers and devices, for example ? to pinpoint opportunities for optimization.

?Fortunately, businesses today can leverage the same tools they?ve used for the traditional PC Web in order to optimize mobile Web services like video advertising.?

The industry is fragmented right now, with different vendors offering one of the above.

But advertisers need one vendor or network to be able to service all their integrated needs including applications, WAP sites and all the rich-media options, including all the video formats.

?Video has enormous potential because of the sight sound and motion experience, which has been proven to dramatically increase ad awareness, message association and purchase intent,? Jumptap?s Mr. Johar said.

?It is one of the leading media types for increasing brand favorability,? he said.

Videos should be short and sweet and non-intrusive?not too dissimilar from the Web, Per Mojiva?s Mr. Gwozdz.

The real key is how to lead the customer from an ad to watch a video, or from a video ad to the next actionable step.

?Keep it relevant,? Mr. Startzel said. ?If it is on Flo TV, which is a total TV experience, then go with your 30-second spot. 

?Best practices dictate consumers engagement lasts a maximum of 15 seconds on other mobile devices,? he said. ?Although for some ads, 7-10 seconds has a higher conversion rate.?