Video Ads Are Shifting Aggressively To Mobile, Says TubeMogul. And Prices Are Dropping

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Video advertising is going mobile, with smartphones now capturing 12 per cent of the video impressions down under, according to a report from TubeMogul.

Its Q4 2105 update reveals that inventory is up Down Under across all formats compared to a year ago. “Mobile inventory was up over 400 per cent from a year ago and topped the list. On a quarter-over-quarter basis, pre-roll dropped marginally and still remains high at an average of 389 million impressions per day. Mobile inventory declined from last quarter, continuing the volatility we have seen since 2014.”

The report’s authors say that on an annual basis, mobile continues to show rapid growth. “We expect it to stabilise as we move into 2016. The mix of 15-second and 30-second ads has changed over time. Last year, 15-second spots took over 60 per cent of impressions, but 30-second spots are gaining more share and now represent 41 per cent of impressions. As viewership behaviours shift to mobile, so too have advertisers. One year ago, mobile represented seven per cent of impressions and grew to over 12 per cent in Q4 2015.”

On the pricing front, the pressure on CPMs all year pressed south. Mobile experienced solid quarters in the centre of the year but fell away in the fourth quarter to end the year lower than it began. All other formats — desktop, connected TV and display — likewise ended the year weaker than they began.

Across the ditch, New Zealand saw a slight quarter-over-quarter uptick in pre-roll inventory in Q4 2015.

According to the report, “The region saw strong year-over-year increases in both desktop and mobile inventory, rising 90 per cent and 312 per cent respectively. CPMs in New Zealand fell in desktop, likely due to the increased supply of inventory. The decreases provide advertisers with an ideal opportunity to reach their audiences cost-efficiently. In terms of ad completion rates, the region has remained steady in desktop, down just two per cent since last quarter. Mobile completion rates increased by 24 per cent, which is important as more viewers turn to their phones and tablets.”

Taylor Schreiner, VP of Research for TubeMogul, said “Advertisers are rapidly catching up with changing viewership patterns, buying more mobile inventory and seeing better completion rates — from 51 per cent to 68 per cent completion rates over the past year alone. VCPMs (Viewable CPMs) have also reduced significantly in Australia since Q1, with desktop pre-roll costing almost half the rate in Q1 dropping from a high of $145.63 in Q2 to $64.61 in Q4.”

Similar studies were conducted by TubeMogul around the world. Among the highlights from other regions:

• BRAZIL In Q4 2015, Brazil had a 23 per cent increase in pre-roll quarter-over-quarter and an increase of 273 per cent since last year. The tremendous growth also changed CPMs — Pre-roll prices fell three per cent since Q3 2015 and were down 46 per cent since Q4 2014;
• CANADA In Canada, pre-roll inventory has nearly doubled since last year and mobile inventory is up four-fold. On a quarterly basis, inventory dipped slightly across formats as TubeMogul continue to push towards higher-quality inventory. Advertisers in Canada favour 15-second spots to 30-second spots, with little changing in the mix between quarters and year-over-year;
• FRANCE France’s pre-roll inventory increased 50 per cent quarter-over-quarter. All formats are up from Q4 2015, with mobile seeing the largest gain of 579 per cent. CPMs in pre-roll are down five per cent, giving advertisers a great opportunity to reach their audiences across more inventory at a lower price;
• JAPAN In Japan, pre-roll inventory was up 32 per cent since Q3 2015 and 302 per cent since last year. Mobile inventory remained flat on a quarter-over-quarter basis, and is also up over 300 per cent since last year. Pre-roll CPMs in Japan are down on a quarterly and yearly basis, likely driven by the strong increases in inventory;
• SE ASIA In Southeast Asia, the story is still one of growth. Most countries in the region experienced growth in desktop pre-roll inventory during Q4 2015. Alongside the growth in inventory, countries also saw a decline in CPM quarter over quarter. Most notably, Indonesia saw a decrease over 25 per cent, giving advertisers a great potential chance to reach more of their audience and at a lower rate. Though desktop pre-roll still holds the majority of impressions placed in the region, mobile is quickly taking more and more share. In Vietnam, we saw the share double from seven per cent in Q3 to 14 per cent in Q4 2015. Advertisers in Southeast Asia tend to favour 30-second ads to 15-second ads, though several countries like the Philippines and Singapore had more share of impressions in 15-second spots this quarter;
• UNITED KINGDOM UK inventory increased across all formats from the same time last year. Pre-roll inventory remained stable from last quarter, tracking down just two per cent. Average pre-roll CPMs decreased five per cent from last quarter, giving advertisers a chance to place impressions more efficiently. 30-second spots in desktop pre-roll and the ratio of 30-second to 15-second spots remained nearly unchanged year-over-year. Globally, we have seen viewership trends clearly shift to mobile. Advertisers in the UK have recognised the shift and the share of mobile ad formats is slowing increasing. This quarter, mobile represented 11 per cent of total impressions, up from eight per cent in Q3 2015;
• USA This quarter we continue to see inventory growth across pre-roll and connected TV formats. Pre-roll prices remained nearly static from last quarter and from last year. Year-over-year, mobile CPMs fell 14 per cent, while connected TV increased 57 per cent. Mobile inventory declined from last quarter, which we attribute to the short-term volatility we’ve observed in that measure since 2014. On an annual basis, however, mobile inventory continues to grow apace. Video ad completion rates decreased across the board, though pre-roll rates still remain high overall at 70 per cent. Mobile completion rates increased 35 per cent year over year and averaged 62 per cent overall in Q4 2015. Unsurprisingly, we’ve seen mobile occupy more and more overall impression share. Advertisers have clearly shifted more dollars to mobile to match viewer habits and now represent over 25 per cent of the mix.

Writing on a company blog, Laura Crane, Senior Research Associate at TubeMogul, noted that “The breakout of different markets allows us to see trends happening in specific markets and how each is growing in terms of ad formats, pricing, and performance. For instance, you’ll see the cost of viewable impressions falling rapidly in the US & UK. You’ll see advertising in Australia adopting mobile at a breakneck pace. And you’ll find that Brazilian advertisers are sticking with 30-second ads, but their viewers aren’t often watching them to the end.”