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An Obstacle-Strewn Path Awaits Mobile Video Ads

An Obstacle-Strewn Path Awaits Mobile Video Ads

Ready or not, brands are going to have to choose an approach to the coming mobile video advertising trend, and the spectrum crisis is just one of many issues conspiring to make that transition less than entirely smooth. "Currently, data plans charge more for video services, and consumers will not want to incur additional expenses to view ads," suggested Cynthia Gallatin of Quinnipiac University.

By Erika Morphy CRM Buyer ECT News Network
08/13/13 5:00 AM PT

As an onslaught of mobile video ads threatens the digital advertising landscape, it's sobering enough to realize that more than a few brands are not fully prepared.

Even more concerning, however, is that our wireless infrastructure Visit the VMware Tech Center is not ready for it, either.

Perhaps worst of all, consumers do not appear eager to shoulder the burden of this ad format and the bandwidth it gobbles up.

What, then, is a marketer to do? Sink money into an ad format that may or may not deliver a pleasing experience to the user, either because he couldn't watch it or because he fell into a rage afterwards when the wireless bill arrived?

Some of these issues are slowly being addressed through various avenues, but the larger question they raise -- namely, is the mobile video ad format ultimately worth it to brands? -- will not likely be satisfactorily answered for marketers until it's too late to back out.

Spectrum Crisis

First, consider the spectrum crisis, which telecom industry observers agree is all but upon us.

"There is definitely a spectrum crisis looming," Tim Weinheimer, senior vice president and group account director of online strategy at Ketchum, told CRM Buyer, citing statistics from CTIA and the Mobile Marketing Association.

"There are more than 100 hours of video uploaded to YouTube every minute -- and growing," Weinheimer explained. "Short-form video like Vine and Dropcam are also growing rapidly in popularity. This trend will continue exponentially, not only with video but with photo and sound as well."

For the moment, a spectrum-sharing model will suffice -- the industry and consumers have little other choice, Weinheimer said. However, this approach will always present user-access limitations and issues.

"High-capacity infrastructure in its many forms is the massive puzzle for the carriers and operators to solve," he said.

A Piecemeal Approach

The spectrum problem is not completely insurmountable, though -- certainly not with massive amounts of ad dollars at stake. Operators will respond -- and in fact are already working feverishly -- in order to be able to have the capacity to offer their advertisers a "solid customer experience," Craig Palli, chief strategy officer at Fiksu, believes.

"Potential solutions include caching, bit-rate throttling and more," Palli told CRM Buyer.

A forward-looking outlook and aggressive planning will also be key, he added.

"Operators who most successfully adapt to the increasing bandwidth demands of today's mobile users stand to be the winners," he predicted.

There is also the growing ubiquity of WiFi to stretch out what is a looming tipping point, Erik Dochtermann, CEO of KD+E, told CRM Buyer.

In fact, "with over 55 percent smartphone penetration and over 80 percent on 3G or better, we are at the tipping point," Docktermann asserted.

WiFi may be a "crutch" in this scenario, Dochtermann said, but its access "expands the ability to effectively serve a quality experience."

'The Shift of Video Eyeballs'

Indeed, a majority of mobile video is viewed via WiFi while at home or in the office, Anthony Iacovone, founder and CEO of AdTheorent, told CRM Buyer.

In the longer term, the build-out of 4G LTE coverage will need to continue, said Iacovone, who is less inclined to panic about the spectrum shortage than others in the space.

"The mobile ecosystem has been gearing up for the shift of video eyeballs to mobile for a number of years now," he explained. "Carriers have expanded their 4G LTE coverage to rival WiFi bandwidth while mobile ad networks and content delivery networks have worked to unify the delivery of video ads to mobile devices."

Short and Sweet

As for consumers, it remains to be seen how they'll feel about the increased wireless bills that will surely result from the video advertising trend.

"Currently, data plans charge more for video services, and consumers will not want to incur additional expenses to view ads," Cynthia Gallatin, associate vice president for online education at Quinnipiac University, told CRM Buyer.

For that reason, it will be imperative that mobile ad videos be short and compressed so as not to trigger extensive expenses for a user's data plan, Gallatin suggested.

In fact, that directive -- keep it short and sweet -- is actually a boon for mobile marketers as they work to navigate this emerging ad format.


Erika Morphy has been writing about technology, finance and business issues for more than 20 years. She lives in Silver Spring, Md.


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