Facebook's ad revenues have soared. Now it is reported to be on the verge of launching video advertising on its news feed. When that happens, mobile video advertising will start to boom.
Twitter's trying to get into it too. With smartphone penetration at 65% and growing in Australia, and the number of people watching online video, does that represent a threat to TV dollars?
Mobile video advertising is embryonic locally and globally. But word in the US is that it is at the stage where online video ads were in 2008. Facebook is reportedly on the verge of launching video ads into users' news streams, although requests for information from the company in Australia here have simply yielded " nothing to share". Nevertheless, Bloomberg is rarely far off the money. Whenever the launch, on a platform with 1.15 billion users, that's a market of 800 million-plus consumers accessing their account via mobile.
Twitter is doing deals with TV stations to put video clips on users' feeds that will also contain an ad, with the TV networks and the social platform sharing revenue. It will also use analytics to see from tweets which people are likely to be watching a show, and therefore an ad. Advertisers could then serve those users something related. In the not too distant future, that will likely include video content.
All of which could be a threat to TV dollars. Advertisers are already trying to screw down on costs with desktop online video and media buyers will likely use online video's lower costs and measurable results as a bigger bargaining chip against the networks. Mobile will only turn the screw.
Downshift or downplay?
A marketer at a major automotive brand told AdNews that online video spend would be "massive" next year and would be used to offset inflation in TV prices. "Why would you buy off-peak TV if you can get cost effective response online within office hours?"
He said that online video - whether consumed on mobile, desktop or tablet - would be used as a lever against the networks and that next year: "We might take a million dollars off free TV", he said.
The TV networks, though, are not worried.
“TV has proven over the years it’s the only medium of significance that has resisted the onslaught of a fragmenting market place," said Nine sales boss Peter Wiltshire. "Given its unquestionable capability as an entertainment and advertising platform supported by innovation through second screen interactivity, I would suggest there is no risk to the medium at all. It’s the weaker media that have suffered.”
Seven said there was no doubt that online video would grow. But the network would capitalise on that growth and broadcast TV was not going anywhere.
"Online video is a key part of our game now and will be a bigger part of our game in the future," said a spokesperson. "We see new forms of delivery as complementary to our broadcast television platform, delivering incremental audiences and revenue. Broadcast television is the biggest game in town today and will become even more important to advertisers seeking mass audiences in a world with more viewing options."
One pot
Media agencies were largely in agreement, even those that focused on digital.
David Thanisch, digital director, Ikon Sydney, said while online video continued rapid growth, with the likes of Facebook and others likely to take a slice of that revenue, "I see TV being as popular as ever."
"The dollars going into online video aren't necessarily going to affect TV that much. I don't see it cannibalising TV revenue." He agreed with Wiltshire that other mediums - such as print and radio - would continue to take the brunt.
Ciaran Norris, chief digital officer at Mindshare, said it wasn't about taking money from one medium or another but complementary channels. On the question of Facebook video, he said the company had some insight given GroupM's position on its advisory board, and that another scale entrant to video advertising could put further downward pressure on prices on the Australian video market "which is often over-priced at present."
"We don’t think about moving budgets into or out of TV, digital or any other medium, but about how best to meet a brief with all the channels available and would imagine that Facebook, like many of their peers, will take a similarly sophisticated view. If they can make a case that their offering supports, extends and amplifies existing TV and AV investment, we think they could have a very interesting story to tell.”
Will it work?
Ally Cooney, head of digital at TMS, said that mobile video was a "game changer".
"You will still have your 30-second TV spot, but you have to consider what you can do to complement it."
But she was sceptical whether 15-second pre-rolls, as Facebook is said to be launching, would work on the platform because users might find them too intrusive. She said she would be "reluctant to roll out a TV ad" onto Facebook because it was not the right content or format for the medium.
However, she thought that mobile video advertising could be better suited to longer form content, given that people are usually killing time on their mobile phones. That might be the best way for brands to complement their TV spend, said Cooney.
She said TV would lose some ad dollars to mobile video - but not on a massive scale and that over time the dollars would return.
Now its over to the mobile video channels to actually start playing.
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.
Have something to say? Send us your comments using the form below or contact the writer at brendancoyne@yaffa.com.au
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.