Stephen Upstone, CEO at LoopMe
Stephen Upstone, CEO at LoopMe
A view from Stephen Upstone

For mobile video to compete for TV budgets requires reach and scale

There are many challenges for those hoping to make money from this nascent and potentially lucrative world of mobile video, says LoopMe's Stephen Upstone.

The mobile video advertising space is fragmented and very few ad tech companies support all mobile video ad formats. That’s not good news for advertisers.

The big global social apps (Twitter, Instagram, Pinterest, Snapchat) have now launched mobile video offerings to attract advertising dollars, giving brands access to their installed base of millennials, these are 18-34 years old and a mobile-first generation that watch very little TV.

The big global social apps have developed their own engaging mobile video ad formats – Snapchat has challenged the status quo and launched a vertical video option claiming that because we use our phones in vertical mode, it should drive higher engagement.

YouTube and Facebook, the two dominant mobile video ad tech players with approximately 70% global market share, focus on two mobile video ad formats: pre-roll and native video respectively.

In addition to the above, traditional premium publishers are also starting to develop their own proprietary mobile video ad formats for brand advertisers.

What’s emerging is a mobile advertising video ecosystem, fragmented by ad formats that can be confusing for advertisers.

Moreover, what’s become evident is that you cannot talk about digital video advertising without taking a holistic and objective view that addresses the challenges around screen fragmentation, scale and reach while using whatever mobile video ad format proves to work best. YouTube and Facebook may be part of the solution, but you also need to look outside those walled gardens to fully tap into your global target audiences.

EMarketer estimates that mobile video will be worth $2.62 billion in the US alone in 2015. You can easily see why mobile video advertising will be worth a very big number in the future - many companies have built their brands using video (TV) for decades, some spend over $1 billion per year on TV advertising and they know how to make it work.

The industry needs to move towards a model whereby advertisers have access to a standard set of mobile video ad formats, giving them maximum reach and scale across the largest number of publishers and ad exchanges. Standards mean that everyone is in agreement coupled with a consistent approach for measurement. The IAB has done this with VAST and VPAID.

Doing so would enable media buys via a single platform for all ad formats giving advertisers one place for comparing apples with apples, instead of different platforms using different approaches. 

Furthermore, using one platform enables advertisers to leverage common set of data and algorithm that automatically optimise across all ad formats and determine what works for a particular campaign. It’s not a foregone conclusion that the same ad format will work for every campaign – that’s why advertisers need options and access to the widest reach and scale possible.

Stephen Upstone is chief executive of LoopMe