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Mobile video surge spurs growth of location-based mobile ad targeting

Mobile video is experiencing an explosion that just keeps on exploding, and that’s giving national marketers an opportunity to spend more on location-based advertising for reaching consumers in more contextually-relevant – and personal – ways.

Smartphones now rival desktop in terms of video consumption, and will likely pass desktop in the coming years. According to data from AOL, 57% of consumers around the world now watch videos on smartphones every day; for desktop, the number is 58%. And while consumers are gradually becoming more comfortable with watching longer-format videos on smaller screens, short-form video is still a widely popular form of entertainment on smartphones. AOL estimates 42% of consumers globally view videos that are five minutes or less in length each day.

The sustained popularity in short-form video on smartphones is great news to advertisers, if only because short-form video is typically ad-supported. Research shows marketers have gradually increased their ad spend in mobile over the past few years. For 2017, 47% of advertisers expect to increase mobile ad spend by at least 25%, according to AOL. And yes, some of that money is coming directly from the TV ad budgets. “In fact, when we looked at TV budgets shifting to digital video, we found that 63% is going to mobile video,” AOL said in its report.

Brands are particularly interested in mobile video advertising because of the location-based targeting abilities the platform offers. Location-based mobile video ads grew from just 5% of total ad spend to 17% in just two quarters in 2016, according to data from Positive Mobile, a firm that specializes in location-based mobile video advertising. Research firm BIA/Kelsey has released findings that further demonstrate the uptick interest in location-based mobile advertising. It estimates annual US mobile ad spending will grow from $33 billion in 2016 to $72 billion by 2021, and that the location-targeted mobile video ad spend will grow from $12.4 billion in 2016 to $32.4 billion by 2021.

Location-based data and targeting can help marketers deliver more relevant advertising to consumers by knowing more about the context around the consumer – whether that be physical location, time of day, or weather in a specific area. Pair location data with other contextual data, and brands can paint a more complete picture of both their target audiences and how best to interact with those audiences on the mobile platform.

And mobile advertising offers marketers new ways to reach and interact with consumers. The smartphone is one of the most personal devices to offer a screen, and consumers have become impressively attached to the devices. AOL’s research found, for example, that 77% of global consumers said they either can’t live without their smartphone or they like to have their smartphone within arm’s reach.

That affinity offers huge marketing opportunities for brands. “There’s no question that the smartphone is the consumer’s primary screen of choice,” said Dan Levi, EVP and chief marketing officer for Clear Channel Outdoor Americas, speaking on a panel earlier this year. “That’s an opportunity to drive behavior. That behavior may not necessarily be a purchase – it may be a share, it may be a photo, commenting on something, or doing research that leads to a transaction later.”

The idea is to get to “micro-moments” on mobile devices – those are opportunities for a brand to engage with a consumer and present a marketing message that fits the context. A popular example of moment marketing is Oreo’s “Dunk in the Dark” tweet: after the power went out during the 2013 Super Bowl, Oreo’s marketing team leapt at the moment to tweet out to its followers, “You can still dunk in the dark.” The tweet resonated with its audience, and was retweeted over 10,000 times within an hour – all on mobile devices, of course. The irony here is that one well-timed tweet received significantly more engagement than Oreo’s Super Bowl ad, which cost millions of dollars to create and place.

These contextual moments present themselves constantly throughout the day for consumers, but the trick is execute on those moments in the right way. “There’s 150 micro-moments on average in a day. For most people, it’s closer to 300 or 500,” said Beau Avril, global head of product commercialization at Google. “There needs to be a way to break through the noise. Just marketing on mobile is going to be much more complicated.”

Mobile phones are personal devices, and advertising on mobile platforms can easily cross the line from relevant messaging to intrusive advertising. Pop-ads and banner ads are incredibly annoying on mobile devices, for example.  “What the goal is, of course, is to have these experiences in a way that they don’t feel like intrusions,” said Andrew Solmssen, managing director at WPP’s Possible. “As an industry, we’ve really trained consumers over the last 20 years that whatever you do, do not interact with an ad. So you have the most interactive platform ever in the world – digital media – but it’s performing no differently than outdoor.”

As brands begin to increase their ad spend on location-based mobile video adverts, the industry risks collectively inundating consumers with advertising. And if the marketing message isn’t truly relevant and engaging in the moment, “consumers are going to glaze over,” Avril said.

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