App Monetization Done Right: Are Video Ads The Answer?

Advertisers of all stripes love in-app video ads. InMobi’s State of Mobile Video Advertising 2018 Report found that advertisers globally doubled the amount they spent on in-app video ads between 2016 and 2017. In the U.S., more than a third of all money spent on in-app advertising during the first three months of 2018 went to video. All kinds of brands are now buying in-app video ads, even ones where impressions and engagement are the major goals.

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But what do app publishers think about video advertising? While its benefits are easy to see for advertisers, it’s less clear cut for publishers. After all, video ads (when done poorly) can be slow to load and annoying for users who just want to read an article or play a game. Integrating video ad files into the mix is no easy feat either, as these formats present their own technical and logistical challenges.

Nevertheless, it should come as no surprise that our research has found app publishers embracing in-app video advertising as readily as advertisers themselves. Between 2016 and 2017, in-app video ad inventory rose 31 percent globally and 163 percent in the U.S. During the first quarter of 2018, over half of all ad inventory globally was video.

Demand is meeting supply. In-app video advertising is a classic chicken-and-egg scenario. Who adopted video ads first: publishers or advertisers? Either way, as long as app users respond well to video ads, advertisers will want to run them. And as long as brands want to run in-app video ads, it behooves publishers to meet demand.

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Here are other key reasons why publishers are embracing in-app video ads:

• It’s valuable for publishers to enable video ads. Advertisers have proven willing to pay more for extremely valuable audiences or placements. For example, one recent study found that brands will pay twice as much for first impressions. And video ads are highly valuable impressions. The InMobi report found that click-through rates for video ads are 34 percent higher than native ads and 56 percent higher than banners. Plus, between 2016 and 2017, video ad click-through rates improved 300 percent. To paraphrase former Illinois Governor Rod Blagojevich, in-app video ad spots are a “valuable thing; you just don't give it away for nothing.” Valuable inventory can command higher prices, making video advertising ideal for monetization.
  
• Technology today makes it easier to display video ads. Three main trends are at play here:
  1. Screen sizes and resolutions continue to increase, which means in-app video ads appear crisp and stand out.
  2. Not only are mobile wireless internet connections becoming far more commonplace, they’re also faster than ever. This helps video ads to load in a timely fashion, with all formats supported by adequate bandwidth in most instances.
  3. The industry’s embrace of VAST over VPAID or MRAID ensures lightweight video ads pre-load on the mobile device, and are not subject to buffering or seconds-long load times.
     
• It’s a valuable way to provide a brand-safe ad experience that works for users. As brand safety concerns continue to mount, publishers - especially those providing news or talking about potentially divisive topics - need to take steps to ensure advertisers don’t flee due to such worries. Video ads, especially immersive formats like fullscreen spots or rewarded video, help to allay such fears because these kinds of in-app ads, by their nature, never appear next to any content. There’s a reason 58 percent of all video ad inventory during the first six months of 2017 was fullscreen.

This is just a small snippet of what’s covered in our 2018 State of Mobile Video Report. For more insights on in-app video advertising today and how it’s progressed, be sure to download the complete guide today.