Mobile video ad inventory jumps 31% as viewership grows, study says

Brief:

• Mobile video is still the fastest-growing ad format with inventory jumping 31% in Q3 from the prior quarter, driving expectations for similar gains in media spending, per the latest report from sell-side platform (SSP) PubMatic. The company said overall mobile ad spending rose 28% from Q2, while desktop ad spending fell slightly.
• Header bidding, which lets publishers offer ad space to multiple SSPs and ad exchanges simultaneously, is spurring mobile ad monetization growth to more than half of header bidding transactions in Q3 from 41% in the prior quarter. Anti-fraud initiatives like app-ads.txt and the rapid pace of mobile development are expanding header bidding into apps, per PubMatic.
• Mobile ad monetization growth will come from more user time spent with new formats like video in the next 18 months, PubMatic forecasts. The firm’s report is based on the analysis of 13 trillion advertiser bids each month.

Insight:

PubMatic’s quarterly report indicates that advertisers are following audiences who increasingly rely on their smartphones to watch video content. The surge in mobile video ad inventory is one of the strongest signs that app publishers are expanding their monetization efforts beyond banners to formats that aim to be more engaging — although some mobile users may find video ads to be too intrusive. In the U.S., mobile video ad spending is forecast to jump 56% to $24.8 billion by 2022 from $15.9 billion this year, according to researcher eMarketer.

In-app video has faced challenges even as adoption has grown among marketers. More than one-fourth (28%) of marketers said they had trouble delivering video to in-app users, per a survey by mobile video software company Penthera. The biggest issues that marketers cited with in-app video were awareness (50%), low engagement (41%) and inadequate metrics (40%).

PubMatic attributes strong growth in in-app advertising to anti-fraud measures undertaken by many app developers seeking to monetize their content, including games. During Q3, the app-ads.txt standard got a boost after Google threw its considerable weight behind the mobile anti-fraud measure. The search giant’s Ad Manager and AdMob mobile ad network in August started blocking unauthorized app inventory as identified by a publisher’s app-ads.txt file. The company has urged publishers and app developers to create an app-ads.txt file and publish it to the developer domain in their App Store or Google Play store listings to avoid getting blocked.