At SHOOT’s New Directors Showcase, on May 23rd at the DGA in NYC, one of the panelists, Peter Nicholson, chief creative officer at Deutsch, spoke about mobile video advertising as a big opportunity for new directors. Third Screen Media/Boston, the mobile ad network that was acquired by AOL on May 15, began playing mobile video ads for the U.S. Navy and other clients last year and will continue playing them for new clients. But Jeff Janer, Third Screen’s chief marketing officer, says there are a lot of issues holding mobile video advertising back, from the lack of video enabled phones to the struggle carriers, publishers and other parties are having to share the revenue. He provides a fascinating overview of the mobile video ad scene in this week’s iChat.
iSPOT: How much mobile video advertising is playing?
Janer: There’s really not very much going on yet. Mobile internet is where most of the action is today in terms of advertising, with banner ads and text links on the wired internet. We thought that video was going to take off as the next mobile media type, but in fact it seems like in game or applications that get downloaded to handsets are more ad supported at the moment. Ads can be dynamically served with applications like MapQuests or weather. With video, you have two types in mobile. You have streaming or video on demand and at this point you’re seeing very early examples of ads being inserted in the stream but more often they’re stitched together with program content so they’re not dynamically changing. The other more linear broadcast model is MobiTV or MediaFlow. MobiTV is dynamically serving ads, but what’s holding it back from wider adoption is it’s still a subscription service. Users have to pay a monthly fee and it depends which carrier is supporting it.
ISPOT: Isn’t that a barrier with mobile video in general with users having to pay to see video?
Janer: There’s new plans being introduced, but subscription pricing is one of the things holding mobile video back. Another is the carriers themselves. Verizon is not putting advertising into V Cast. And Qualcom’s MediaFlow is still working out the business model with carriers and hasn’t rolled out an ad model because they’re still trying to get the programming out. They have a broadcast video network and at some point they’ll look to support it with advertising but they’re not ready yet.
iSPOT: What kind of mobile video advertising have you done?
Janer: We’ve done a hybrid and we were one of the first to do it. We started last November with a click-to-video campaign for the U.S. Navy and we’re doing it now for the Marines and Cisco. Within the mobile web environment we put up a static banner on the mobile web site that says click here to play the video, so the ad was video being served up with static content. It was interesting because not all handsets support video playback so we created three different executions of the ad. If the handset didn’t support video we served up a static banner. If it supported video but you had to download it, we took them to another site where they could download the video. If it could auto play, then we served up that version. The performance of auto play back was a 2x increase over the static banner and the download which suggests that if somebody could play the video they were interested in looking at it.
iSPOT: How did you measure the response?
Janer: Since we’re serving it, we can measure it. We know if someone clicked on it and we can measure the duration.
iSPOT: How do the revenue shares work with mobile video ads?Janer: One of the other complicating factors in terms of dynamic ad insertion into programming is there is another player in the value chain that doesn’t exist on the mobile web. There are companies that are play list managers. They don’t serve anything, they manage the content. They are the workflow manager for V Cast for example. They say they have time they need to fill with the programming so they call the ad server to display an ad into the stream, then in 15 seconds the content will start up. They’re a conductor of the programming and they’re another player that needs to be paid for what they’re doing. You have a small pie to begin with and there’s a lot of pieces in that pie.
iSPOT: And the carriers and the publisher are sharing revenue, too.
Janer: Absolutely. Carriers are saying this is running on my network so I want a share of ad revenue and publishers are saying it’s running in my content, so you’ve got a lot of hands out there. It’s complicated. There’s not a lot of it, there’s subscription barriers and complications in the value chain and a lot of players, so that’s why it’s slowing down adoption.
iSPOT: What can Third Screen Media do to increase the use of video advertising?
Janer: We were the first to offer click-to-video and while everything is getting sorted out we can dynamically serve video ads, so let’s start there. Based on the success of last fall’s campaign, we’re rolling it out.
iSPOT: What kind of production issues are involved in creating mobile video ads?
Janer: It depends on where you draw the line on production versus delivery. On the production standpoint, the initial idea was we’ll just take a :30 and cut it down. That’s okay at some level, but it plays back on a two inch screen, so you want to think about production value and shot blocking. In a crowd scene trying to pick up someone wearing a red scarf it’s not going to register all that well. But the problem is not being addressed at the moment and you’re seeing repurposing of existing content. The other complication is transcoding into mobile performance ads. There are several formats specific to mobile play back, Windows has one and there’s a PGP format. They’re different from web formats and transcoding has to happen in the stream for it to play back. And there’s no way a :30 spot is going to function when you’re dealing with short content. The video ads we’ve done are :10 bumpers or :15s which is the right time frame.
iSPOT: What impact will the acquisition of Third Screen Media by AOL have on the advancement of mobile video ads?
Janer: I think it’s kind of indirect for it’s impact on mobile video. The direct benefit is the AOL sales force, which is 160 people. The major advantage for brands and advertising agencies is to be able to talk to them. They have web, wired internet and Ad.com’s video offering and now they have Third Screen for mobile. The impact will be how the advertisers and agencies can integrate those pies across media channels.
