Mobile

Next mobile video advertising standard will be a game changer

Standards are not known for being a rousing area of industry discussion, but that does not mean they aren’t critical to a functioning ad tech ecosystem.

Each standard’s release adds more oil to video advertising’s engine, ensuring it is running smoothly and firing on all cylinders. The usual incremental adjustments that we have accepted as the norm will take a back seat when a new version of the IAB’s mobile advertising standard gets the go-ahead.

Instead of the baby steps usually seen in standards point releases, the next release of Mobile Rich Media Ad Interface Definitions (MRAID), a specification that clarifies interoperability between publishers’ mobile apps, ad servers and media platforms, will be more akin to a low-gravity lunar leap. Display advertising’s founding fathers in the nineties would never have dreamed up the type of data that today’s marketers are set to access through MRAID 3.0.

IAB future-proofs MRAID

Although there is no official word from the IAB that the 3.0 release of MRAID is imminent, references about what the ad industry can expect were made in 2.0’s public comment document. Buried in the PDF is copy describing future capabilities of the MRAID API. The IAB would like to see the advertising SDK queried for smartphone features such as an accelerometer, compass and GPS.

Besides the above trio of inputs, Apple’s latest mobile device, the iPhone 6, also boasts a barometer, three-axis gyro, proximity sensor, ambient light sensor and biometric fingerprint sensor. These are only the tip of the iceberg as Japanese semiconductor firm ROHM offers a UV sensor and there is talk of air quality sensors too.

Of course, there will be concerns about privacy. Consumers will need to be educated about the sort of information advertisers can use. There will be no personally identifiable information. All the data recorded by sensors will be used to deliver ads to the right person at the right time. In order to receive subscription-free content and services, a value exchange must occur, and new data sources will be a powerful tool to ensure consumers receive more relevant and engaging ads.

Sensors and the engagement evolution

(image via techradar)

Biometric sensors will present brands with a unique opportunity, thanks to the rise of premium wearables. Temperature and heart rate, for example, can be used to improve the whole advertising experience for consumers. Imagine if you could measure how much an ad increases a viewer’s heart rate!

Ad-blocking software is becoming more pervasive. Eventually, only more engaging and relevant experiences will have any hope of cutting through. The data gained from biometric sensors may be part of the solution.

Allowing video advertisers access to sensory feedback in mobile devices will provide an unprecedented level of information. Some companies are already ahead of the curve, pre-empting any formal standards release. Adtile, for instance, makes use of a smartphone’s various sensors to create an interactive motion experience with ads. It has examples where a user shakes their phone to create a milkshake or receives directions for the nearest coffee shop. While Adtile only offers rich display formats, it does showcase the power of these sensors.

In addition to contextual information such as content categories, brands will be able to deliver dynamic ad creative based on a rich array of data such as a consumer’s movement, altitude, or air pressure. The opportunities are further expanded when a wearable is added to the mix. Imagine an iPhone ad that culls data from an attached Apple Watch on heart rate and recent exercise to deliver video ads around the health category.

In the not too distant future, video advertisers will benefit from the contextual information provided by a burgeoning array of sensors that each new generation of smartphone brings. Different formats, whether that is pre-roll, in-banner, in-stream or in-app interstitial, will deliver so many advertising possibilities, once the communication between mobile sensors and advertising creative is standardised. With all this data, will the inevitable release of MRAID 3 be the first step towards video advertising sentience?

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Mobile Web – Optimising inventory and increasing revenues

Mobile Web

In-app inventory is playing the role of prom queen rather well right now. In the digital ad spend popularity contest, the votes are in and she rules the school. But publishers who haven’t taken the leap into app publishing can still drive substantial revenue from their mobile-web properties. The IAB are introducing standard models for delivering digital inventory to the programmatic market that will improve consistency and performance. The increasing popularity of video content and the mobile engagement rates of video means quality mobile web content can still command attention, and attract advertising investment.

That’s not to say that mobile-web doesn’t have its issues for advertisers, and for media companies to address the lag in mobile web revenues they need to first recognise the problems and then resolve them, learning from users’ behaviour with other channels.

The problem for advertisers

  • Mobile does not accept third party cookies meaning advertisers are often buying blind and this makes mobile video content a lot less valuable in the programmatic market. Categorisation has to be based on the URL, which needs to be validated for brand safety as well as content type and all of this relies on additional input and time-consuming processes.
  • Content is sometimes created without a second thought as to mobile responsiveness and user experience. This can make the performance of advertising campaigns abysmal on mobile. If you’re creating digital content, you need to be thinking mobile, not as an added bonus but as the main game. Mobile-first is an ancient concept now; it should be second nature.

Growth

In-app content is out performing mobile web content and its growth is projected to skyrocket by 2017/2018, widening the performance gap further.

Projections from IDC and App Annie show what the expected increase looks like in the top geographies comparing desktop, mobile and in- app:

While the above graph shows massive growth in the app world, there is still healthy growth predicted for mobile web, and still much more revenue to be made. So it’s positive signs for the future of mobile both web based and in-app.

Mobile web is useful and effective

Mobile web is still a powerful source for finding information via search.

 

Users turn to search engines and branded sites to begin their research journey, a journey that often leads to further investigation or a purchase. Mobile web inventory provides brands with a connection to audiences at that important research phase.

How can media companies provide better mobile web optimization and experiences for audiences?

Use and provide data

Registering your site for data collection through third party data companies such as Krux will help give buyers the ability to target more methodically and give them confidence in the quality of your inventory. It’s because mobile web doesn’t accept third party cookies that this type of analysis need to be offered voluntarily by media companies. If you are willing to offer the information yourself, it not only provides advertisers with valuable insights to buy against, it increases your credibility as a premium, brand safe publisher.

Use the data you have to better understand your audiences and what content they engage with most.

Be responsive

It makes sense that to have valuable mobile content, the content needs to cater to mobile display and respond to the way users would engage via their devices.

Google now ranks content based on its capacity to be viewed on multiple devices and sites that are not mobile responsive, will be penalised. Mobile web video that cannot be viewed on tablet or mobile is wasted inventory.

Create non-flash video content

Ensuring video ads support the new VPAID within MRAID standard (see MRAID blog) HTML5 integration, allows advertisers to display creative across mobile web inventory without it breaking. One of the biggest problems with mobile web content is the way it’s built in the first place but the IAB has standardised the way mobile content and mobile advertising should be delivered to ensure quality and performance so these issues can be overcome and revenues increased.

Device

Although an overwhelming majority of content is viewed on smartphone compared with tablet, CTR is much higher on the larger screen device – 55.4% higher in fact.  Ensuring your mobile content is responsive to all devices, not just smartphones is important. Design you web page to so users can easily navigate, play videos and share socially.

Don’t underestimate your mobile web inventory

Mobile web inventory can be improved immensely which will increase its value in the market and help encourage brand budgets to be spread more widely across the mobile ecosystem. Investing in the right content where audiences are entrenched, such as video, is an important factor in realising the maximum revenue from your inventory. It’s about focusing on quality and providing the data needed to deliver effective campaigns without the clutter.

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When it Comes to Mobile Advertising – In-App is in Vogue

Make no mistake, mobile content is booming and brand advertising across mobile channels is taking the programmatic ad market by storm. It’s inevitable that as consumers migrate their video viewing to smartphone and tablet, brand advertising follows suite.

The rise of mobile advertising

Mobile ad spend has taken over that of desktop and this year $14.6bn will be spent on mobile display advertising compared with $12.38bn on desktop. What’s really interesting though is that spend is going to increase dramatically on mobile and decrease on desktop as budgets move to in-app and mobile web environments and as social media appetites become more and more insatiable, especially on smartphones.

eMarketer predict that display advertising on mobile will reach $25.69bn US dollars in 2017 as more immersive ad formats such as rich media and video increase across the market.

Much of mobile’s growth is being driven by the in-app advertising market. eMarketer’s prediction is that in-app advertising will account for 72% of all mobile ads this year – and that mobile video ad spend is set to increase 70%.

If media companies can get to grips with why this channel engages users so successfully, they can capitalize on its opportunity as an advertising channel and lucrative revenue stream. That’s what I’m going to focus on in this blog. 

Why is in-app inventory so appealing to brands?

Because users love apps

In-app advertising reaches users already engaged in content at a deep level. These users have made a conscious decision and commitment to download the app to their mobile device. That app environment provides advertisers with data such as user location and social profiles that provide valuable targeting capabilities.

Apps come with a set of terms and conditions that users must accept to install the app. While it is very rare that users actually read these terms (have you ever?) there is usually a pop up window that tells you what sort of access/permissions the app requires.

When we download an app, we enter into a value exchange there and then whether we realise it or not. What we are exchanging is data about ourselves, not necessarily personally identifiable information, but still very valuable data that advertisers can use to target campaigns more effectively.

It’s fair to say we expect our experience to be of a higher quality if we provide either money or data in exchange of the privilege of the download. Free apps too however, need to be funded. Just as digital desktop publishers need to make revenue from their inventory, so do app publishers. Creating free apps doesn’t generate revenue, it’s within the inventory that the value lies.

Advertising in-app can deliver more relevance, be more consistent in ad format display and it can be more engaging, not only because of the nature of the app environment but because the IAB have introduced the *MRAID standard that makes it easier for advertisers to adapt their creative and format to suit the app type.

It’s a trend supported by data

Time spent with mobile

eMarketer reported 12% of time spent was with mobile web, and 88% was in-app (comScore data).

In-app engages

  •   In Q3 of 2014 InMobi reported that in-app CTR was nearly 2.8x higher than that of mobile web.
  •  In May 2014 The mobile video benchmark study conducted by the MMA found that 76% of mobile ad views occurred in-app.

User engagement and acceptance

In-app ads are consistent in appearance, unlike mobile web where the zoom level and screen size, etc. can alter the experience. Users are familiar with apps having an associated cost. They understand content comes at a price and advertising is an acceptable value exchange.

Talking technical

In-app offers a unique identifier, allowing tracking and targeting. The app is categorised by default in the app store. In addition, mobile apps uniquely provide fine location data, which can be useful for precision targeting, or as an input for derived audience targeting.

Growth/longevity

Mobile in-app advertising spending is expected to reach 16.9bn dollars by 2018 (Statista.com) – that’s in-app spending alone! The mobile market is a programmatic advertising mecca and in-app video is an incredibly engaging format for users.

The time is now and the opportunity huge

Providing this quality video inventory, in-app, at scale with the pre-bid data that gives brands maximum opportunity to target the right audience is something we don’t have to wait another three years for. It’s happening right now. App usage has never been higher and engagement never stronger. That’s why every day app publishers are missing out on the rich revenue potential of in-app video advertising. Media companies who can make the leap to app creation can support online content with app inventory and those who already have, can look to video to keep users engaged and revenues rising.

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MRAID – the Language of Love in the App environment

In-app video monetization has taken flight, with engaged US viewers spending 88% of their time on mobile consuming in-app content (according to ComScore 2014). Advertisers know where to reach their audiences when they’re engaged, but they aren’t managing to do it quite right just yet. The inconsistency in publisher video players and the large amount of Flash still being used means not all content is being monetized and many ad impressions are being wasted. The biggest culprit inhibiting mobile video advertising is the Flash monster.

Flash based content often breaks, it doesn’t scale across platforms, often requires updates and numerous plug-ins; the list of issues goes on.  It’s a wonder mobile manufacturers and media owners like Apple haven’t moved to pure HTML5 based devices sooner. So for an industry that can’t wait, what can be done now?

         

HTML5 is a standard code that talks to multiple browsers and devices without causing inconsistencies and this has a huge impact on mobile advertising. The IAB has recognised the need for a universal language that allows video content within an app environment to be monetized using basic HTML5 and JavaScript code. They have defined a ‘language’ that advertisers and media companies can use to speak to each other, to get the best out of their campaigns, reduce strain on developers and increase revenues. That language is MRAID.

The function of MRAID

MRAID stands for the ‘Mobile Rich Media Ad Interface Definitions’ and essentially it creates a simple bridge between the disparate coding of the app world and the ad market using HTML and JavaScript. It allows the two environments to converge with a one-size fits all approach to in-app banner, display and interstitial advertising. Media companies will invariably have different SDKs for their apps which makes things difficult for advertisers because each SDK will require different specifications from the ad tag to enable a variety of advertising formats. MRAID acts as a standard API for all apps that allows in-stream advertiser/brand creative to translate across any browser and any mobile device. This IAB backed standard replaces the Open Rich Media Mobile Advertising initiative that was known as ORMMA.

How does it work?

MRAID sits between the app and the ad and creates a container that loads an ad within a web-view in the publisher app so the user stays within that environment. The IAB standard size of that ad is 320×50 pixels but the ad can tell the container if it wants to do something, such as expand or close. It then creates another view that links to whatever page it’s been asked to point to.

MRAID is a standard engendered by the IAB to make it easier for the industry to communicate to mobile. For developers it takes the guesswork out of matching ad specs and inventory capabilities because it’s as simple as writing a bit of JavaScript – instead of having write complex instructions into code. It means more ads will be served because there is an understanding between both sides meaning a reduction in errors. When information is clear, as it is using MRAID, ads are displayed correctly in-stream, rather than being passed back.

Image from the IAB MRAID Video Addendum

How are Coull using MRAID?

Coull uses MRAID in our SDK to serve our in-video overlay and interstitial ad formats. We’ll soon be able to serve even more ad formats within the app environment because the MRAID container will be able to use VPAID ad tags to load a video within the publisher’s app. This will enable MRAID to control the ad and display it as either a pre-roll, interstitial or post-roll video within the app’s video content stream. The IAB are currently working on this important update that will have a massive impact on mobile video ad revenues.

When combined with validated and enriched inventory, MRAID gives our demand partners more confidence in the mobile market and media companies are able to make the most of their entire inventory.

What problem does MRAID solve for media companies?

  • Media Companies with mobile video content can integrate rich media ad formats without having to worry about how it’s displayed.

  • In some cases MRAID can communicate with device functions and complete an action on behalf of the user, such as ad information to a user’s calendar, adding value.

  • The clincher is that media companies can earn more revenue from their apps without having to invest in additional development time, and without the risk it may fail.

  • MRAID compliance increases the value of inventory because advertisers will pay more it.

What problem does MRAID solve for brands and advertisers?

  • MRAID takes pressure off of the ad developer, saving valuable time and improving ad delivery success.

  • Makes buying inventory programmatically more efficient and gives brands more confidence in their purchase decisions.

  • Advertisers can purchase with ease across platforms, reaching audiences at scale.

  • The only requirement for MRAID is that the SDK the application chooses, should be MRAID compliant and recognise the API calls from within the ad code. These come from the publisher or sometimes the IAB, so working with compliant media companies increases the success of the ad campaign.

MRAID solves a host of problems for vendors, publishers and advertisers and makes the programmatic trading of in-app inventory better for all parties, including the user who can now experience higher quality, more personal advertisements, at the right time in their engagement.

The IAB have made addendums to the MRAID API including MRAID 1.0 and MRAID 2.0 and will continue to do so to improve its functionality. The responsibility is on media companies, advertisers and technology vendors to ensure they are up to date with MRAID specifications, and the onus is on mobile device manufactures to move away from a flash first environment now, and emerge into the mobile first content world.

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Coull Quickie – May 2015

In the Coull Quickie for May we bring you a snap shot of the biggest ad tech news of the month – including the biggest acquisitions, Facebook’s new instant articles format, Twitters latest release, the MRC’s new mobile measurement guidelines, and we reveal while some big brands are pulling budgets from premium media companies. It’s all here in the Coull Quickie for the month of May.

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Digital Innovators Summit – Innovate or Die

Digital Innovators Summit – Innovate or Die

Innovate or Die

That was the message from the recent Digital Innovators Summit #DISummit in Berlin, attended by Business Development Manager Rebecca. Forge ahead or be left behind is the name of the game, but here’s some context behind that message and Rebecca’s thoughts on how the ideas raised can be applied at publisher level.

The key areas of innovation and execution that publishers and ad tech companies need to focus on in 2015-16 will be:

  • Programmatic
  • Mobile
  • Video
  • Data
  • Native

Programmatic

One thing made very clear at the summit was that programmatic does not lower the value of inventory. Regardless of how content is traded, if you’re able to give advertisers what they want, CPMs will remain high. Programmatic enables buyers to reach their audience, at the right time and place. Publishers can expect higher CPMs for validated inventory (at Coull we class validated inventory as video that is viewable, human, and brand safe) and as the industry pushes for this, quality will be rewarded over quantity.

Providing advertisers with a brand safe environment with transparency on domains means confidence will only continue to grow in the programmatic space. Being able to deliver this at scale is the key to more advertiser budgets being spent programmatically. AMEX is leading the way here and has moved 100% of their digital ad spend to programmatic.

Two mediums that are really at the forefront of the programmatic revolution are mobile and video.

Mobile

Publishers need to start seeing mobile as a medium in and of itself not just an extension of online.

The Innovation in Media Magazine, World Report[1], predicts that a US $64 Billion of ad spend will be spent on mobile in 2015, that’s 60% of global ad spend and, that’s this year! On average people check their smartphones 221 times a day, so advertisers have the potential to reach their users 221 times in a day, in an engaged and personalised environment. Publishers that aren’t equipped for mobile will quickly find themselves unable to compete, it’s no longer about switching to mobile; it’s about doing mobile content better.

The key factors when building a mobile site according to the report; you need good content, it needs to be quick, constant, concise and responsive.

Video

79% of all web traffic is video. We know that the majority of this is YouTube, but I think what it indicates is that people want to consume information in this way more than ever before. Publishers cannot rely on strong editorial if that is not the medium in which people want to consume content. Publishers must adopt a video first approach to content.

It’s not just about keeping your audience engaged, it’s also about providing premium spaces for advertisers to invest. The problem is not with demand, it’s getting the supply and persuading publishers that this is where they need to invest in terms of content.

Some economic areas are experiencing down turn and though they desperately want to invest in video, they lack the required resources. They know where they want to be but they can’t get there in time and are therefore restricted. It shows that regardless of intentions, strategy and infrastructure need to be in place for successful campaigns to be possible.

Advertisers see over 800% more conversions with video ads than any other online ad. This means that average CPMs should continue to increase across premium inventory. However, a video strategy is also needed to ensure, relevant, quality content for audiences.

Value from Video

Part of any video strategy should consider how they might re-purpose that video, making yield per video an important metric for publishers. Hearst’s Gary Ellis demonstrated how they are using video across multiple properties and markets, eliminating duplication of work in creating video and giving more time to niche editorial for that property/market.

The message to subscription-based publishers was not to paywall video content. Video is a ubiquitous form of media and is all too easily accessed for free by users, so paywalling it won’t increase subscriptions. What it might do however is to lose you your audience.

DATA should inform – it’s no good if you’re not asking the right questions

Part of the problem media companies are having with big data is that it isn’t being used correctly to inform decisions and strategies. From the outset companies are not always asking the right questions, and can sometimes be measuring the wrong thing. Metrics can be flawed and ad fraud is also muddying the water when it comes to validation.

We need to ask the right questions, measure the right data to answer those questions and, most importantly, take action.

Lutz Finger, Author of Getting the best out of Big Data elucidated the problem of asking the right questions with an Alta Vista and Google example. Alta Vista is an example of a company that was asking the wrong question. In the mid-90s, Alta Vista was able to search more of the World Wide Web than any of their competitors, indeed more than was even thought to exist at the time, due to a fast, multi-threaded crawler.

However, this wasn’t the function that people needed in a search engine. What people wanted wasn’t more search engine results, what they wanted were more relevant results. This is where Google gained ground, it didn’t matter that back then they didn’t have the same resource or capabilities as Alta Vista, they had the right question in the beginning.

Once we have framed the question, we need to measure the right metrics.

Once the question is framed, it needs to be measured with the right metrics. So, if we want to know whether an ad is effective or not, we need to define what metrics are suitable to analyse that performance.

Engagement rates as we all know are flawed, issues with bots and ad fraud mean clicks are unreliable and VTR and viewability all have inherent problems. All these different metrics need to be applied together and used to build a model that we can make inferences from.

Once the data that informs has been gathered, there needs to be action. Implementing a strategy based on the data seems obvious but advertisers and publishers are failing to do this. Crack this seemingly simple set of principles and you’re on the road to success.

Native

So far in 2015 25% of publishers used native advertising on their sites. Advertisers report a 55% uplift in brand affinity and 70% of users say they prefer native advertising to banner ads.

Good native advertising can be just as good as editorial so long as there is no ambiguity over the fact that it’s sponsored content. No one likes being deceived, and not making a clear differentiation between sponsored content and editorial, is evasive, it’s uncomfortable. Native has been used in print for a very long time in the form of advertorials and Hearst has been particularly good at adopting this for brands such as Elle and Cosmopolitan. A partnership between Estee Lauder and Hearst, saw them launching Cosmopolitan Nigeria, a market that Estee Lauder were keen to enter. Through the use of native ads they have secured a great brand partnership but have kept their editorial integrity through clearly signposting that this content was sponsored.

Native, like mobile, video and programmatic is here to stay and there are huge branding budgets to be had if the publisher can get it right.

Go forth and make it work

The elements covered in the Digital Innovators Summit were not new, but that’s okay because it was focused on how to make these things work better, to be more effective and more compelling. There were some great discussion points and I think everyone came away thinking a lot deeper about what it is we’re trying to achieve when we innovate. It’s nice having new, shiny things -but it’s even nicer when they work.

[1] In association with Forrester Research

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Learning from the App Strategy Workshop – Los Angeles March 26th, 2015

Learning from the App Strategy Workshop – Los Angeles March 26th, 2015

The running joke at the recent Application Developer Alliance’s App Strategy Workshop in Los Angeles was that 2015 has been declared the year of mobile.  It’s funny because the years 2011 through 2014 were also declared the years of mobile. Humor aside, all this shows how growth in mobile is only accelerating.   In reference to mobile apps, a recent white paper by comScore announced that in 2014 “Mobile app usage exploded on its way to becoming the majority of all digital media activity.” With that trajectory in mind over 250 app-entrepreneurs joined companies such as Ad Colony and Millennial Media to learn how to turn an app start-up into the next big digital media success story.

As distinct from the “mobile web” where content is viewed through a browser, mobile apps enable deeper user interaction with the content. With the well-defined and highly engaged audiences that apps create, high CPM advertising is often the best choice for monetization. However, with a lot of money on the table, app startups face intense competition to win users.

A winning product-market strategy (and some luck) is required for apps to be discovered and downloaded.  But with more than 1.5 million apps in each the iOS and Android stores, it’s easy for even the best apps to go unnoticed. Of course, the Holy Grail of app discovery for developers is to be featured prominently in the iOS or Android stores. More exposure equals more downloads, a larger audience, and more revenue.

During the conference, much of the discussion centered on how to get apps downloaded. There was a spectrum of viewpoints on the best approach. Some speakers advised attendees to build and iterate rapidly, exposing their apps to rigorous testing from of a live audience. Other experts held that apps need to be largely bug-free and polished, in order to take root with early adopters who will evangelize it. Everybody agreed that successful apps need to have robust features and that entrepreneurs must be bold and decisive to make their product catch fire in the market. Several speakers even endorsed spending more money on app distribution than on the actual product development.

App creators face many challenges familiar to all media businesses. For example, continuously expanding the audience is essential; but staying highly focused on the core product attributes is required. Even with the best planning, app releases can be buoyed or eclipsed by just about anything else happening in the world.  In short, having a great app is no guarantee of success in the market. Fortunately for app entrepreneurs there is a well-developed ecosystem of vendors to service and support their projects in every way conceivable. This conference showed the strength of this industry. Of course we should expect no less in this age of mobile.

As apps become ever more engaging and essential, revenue opportunities will increase. However, monetisation must respect the intimacy that exists between a user and her device. Native, in app advertising enabled by technology such as Coull’s SDK can not only deliver revenue, but also add value to the user experience.

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Brazil: part 2 – The industry perspective

In Part 1 of my blog series on Brazil, I looked at how consumers use the internet and digital media – specifically video. In this post I am looking at the digital advertising industry in Brazil – the investment in advertising and the big players.

Digital Ad Spend

Brazil is becoming an increasingly lucrative market for the digital advertising industry. When it comes to digital ad spend, this country is way ahead of the game in its region, with an estimated half of digital ad spend in Latin America coming from Brazil. eMarketer predicts a 77% increase in ad spend from 2012 to 2015 and an expected $4.94bn in spend by 2018. The chart below gives us a closer look.

adspend-brazil.png

(Stats for chart from eMarketer)

To put this into context, this year the investment in digital advertising in Brazil is more than three times that of Mexico, and 10 times the amount of Argentina. Brazil’s double-digit gains will continue, pushing total investment in Latin America to $9.35bn by 2018. Despite this, when we look at the grand scheme of things, Latin America will still claim just 4.4% of the global digital ad spend market in 2018.

Mobile Ad Spend

Brazil is taking the lead in digital advertising spend in Latin America, and the same trend is also being seen more specifically in mobile internet ad spend, with Brazil now accounting for 43% share of the total Latin American market.

Take a look at the chart below which shows the estimated ad spend on mobile internet display advertising in Brazil (data from eMarketer). As you can see, it’s estimated that investment will increase fivefold between now and 2018.

mobile - brazil.png

 

Why the investment?

Big audience

Brazil has the fifth largest internet audience in the world and is third place in terms of time spent online, behind the U.S. and China (comScore). 40% of Latin America’s 169 million internet users are in Brazil. It’s estimated that around 55% of Brazil’s population are internet users, with desktop taking a 77% share of that traffic, and mobile taking 23%.

Online video an increasingly popular channel

In December 2014, 65.5 million unique online video viewers aged 6 and older lived in Brazil, translating to 86.5% of internet users in the country – the highest penetration rate of any market studied (eMarketer – data from comScore).

Engagement with video advertising is good too. In September 2014, Brazil boasted the highest completion rate of any country for video ads served by DoubleClick. Brazil’s 87.1% video ad completion rate was nearly 41% higher than the worldwide average (eMarketer).

Increased use of mobile

In 2013, sales of smartphones in Brazil grew by 123% with over 35 million of these devices sold to consumers. The lowered cost of smartphones and rapid expansion of mobile networks and 3G has clearly contributed to this. To find out more about this click here. It is expected that the number of mobile phone users in Brazil will reach almost 170 million by 2018.

The digital advertising landscape

Ad Networks

One of the biggest ad networks in Latin America (second only to Google) is RedMas, which reached 103.8 million users in March 2014. RedMas serves the US Hispanic and Latin American markets and have offices in the USA, Argentina, Chile, Mexico, Peru, Venezuela and soon, Brazil. Samba Ads was the first video advertising network in Latin America (established in 2012), and have a particularly strong focus on Brazil. By 2013, Samba Ads had served over 100 million video ads across their network. Other ad networks serving Brazil include Batanga, Alcance Media, Pulpo Media and Impaktu.

brazil ad networks.jpg

Publishers

Below are the top digital publishers in Brazil and the number of display ad impressions they served from Jan-Dec 2013. Data from ComScore.

Facebook                583.8m

UOL                        120m

Globo                      118.6m

Microsoft Sites         94.7m

Terra – Telefonica      90.3m

Google Sites             81.6m

Yahoo Sites              36.7m

R7 Portal                  29.6m

IG Portal                  23.3m

Grupo Abril               7.9m

Advertisers

Below are the top online advertisers  in Brazil and the number of display ad impressions they served from Jan-Dec 2013. Data from ComScore.

Netshoes                22.5m

Dafiti                      22m

Netflix, Inc.            18.5m

MRV                     13.6m

OLX                      12.7m

Microsoft Corp       12.1m

Itau Unibanco        11.2m

Globo                   10.5m

Unilever                10.2m

Net Servicos        10m

Programmatic adoption

Despite some doubts in 2013 about Latin America adopting RTB and programmatic standards, it is estimated that programmatic display ad spending in Brazil will grow over the next few years. Latin America in general holds a small share of the total programmatic market worldwide (5%), but research from IDC predicts substantial growth in the next few years. The chart below illustrates.

progadspendbrazil.png

(Stats for chart from eMarketer)

As you can see, total spend from both Brazil and the rest of Latin America will soar from now until 2018, with the biggest growth seen from last year to this year (2015) at a 579.7% rate for Brazil and 598.9% increase for Latin America.

For what was once a relatively modest market, Brazil is quickly maturing. With a substantial growth in ad spend year on year, and the move towards a programmatic environment, it’s certainly a market that’s setting up for an influx of opportunistic advertisers and media agencies. To read about why Brazil is an emerging market in terms of digital consumption, read my previous post.

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Video markets across the world: Thailand

So far in the series we’ve looked at China, Brazil and India gaining an insight into emerging video markets that we in the West have little exposure to. Today I’m going to look at Thailand, one of many Southeast Asian markets experiencing rapid growth in their digital economy- providing new and exciting opportunities for advertisers to reach a young engaged audience.

An Economy Embracing The Digital Age

Thailand, The Land of Smiles, has the second largest economy in Southeast Asia and this is partly due to its low unemployment rate and previously booming export and tourism industries. Although the country has flourished in recent years the boom has come to an end and the country has began experiencing slow economic growth. Political instability and record flooding have resulted in the country losing some of its export business which accounts for 70% of the country’s economy. Although some industries have suffered there are others that have flourished- including Thailand’s digital economy driven by younger power users. Thailand is part of a cluster of Southeast Asian countries accommodating rapidly growing digital economies, 6 out of the top 10 of these reside in Asia with Thailand ranking in the top three amongst China and Malaysia. Its e-commerce is now worth $22.7 billion and is set to rise to $30 billion (1 trillion Thai baht) by 2016.

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An Economy Embracing Online Video

Thailand has three main video sharing platforms, YouTube, Sanook and Duclip. Duclip is a local video sharing website whereas Sanook is a local forum which contains a video sharing function. Out of the three, YouTube remains the most popular video sharing site due to its speed and connectivity. Thailand’s online video consumption goes deeper than just shared video, the country even has the highest online TV penetration in Southeast Asia at 76%.

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Thailand is one of the most engaged nations socially with 87% of internet users accessing Facebook weekly compared to the global average of 47%. Social engagement is helping online video reach a large percentage of the population and the establishment of 3G mobile data communications has helped increase digital media consumption on the whole. As it stands the majority of online traffic still comes from desktop although mobile traffic is growing at a rapid rate. The number of mobile devices is ever increasing, as is the demand for mobile connectivity and 4G is currently being trialled in selected areas of the country. Smartphone penetration rises catalysed by the speed at which content can be accessed, as a result mobile e-commerce has become popular with 51% of smartphone users reporting to have made a purchase using their phone. This spending power comes from a young demographic with 72% of mobile users in Thailand below the age of 24.

There is a growing number of mobile users who are young, engaged and accustomed to online spending. This provides a clearly defined opportunity for advertisers to target the demographic currently fuelling the nation’s e-commerce. To further the opportunity for advertisers, there is an abundance of content, Thailand has the biggest online video market in Southeast Asia in terms of inventory size. And just like most other emerging markets, the amount of inventory traded programmatically is growing. Thailand has seen a larger rise in RTB impressions than any other country in the Asia-Pacific region experiencing growth of 313%. It’s safe to say that Thailand is fully aboard the programmatic train and advertisers are turning to its programmatic markets to access the best content.

In summary, Thailand holds huge value for online video, especially for advertisers. Online video platforms are popular, there is a growing number of young and engaged digital users comfortable with online spending and the programmatic pipework required to reach them is maturing, presenting advertisers with a hugely appealing marketing channel.

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The online video market in India – Audience and Opportunity

Dan kicked off this series of global online video market blogs with an introduction to China, specifically how online video is consumed and the attitudes of consumers toward revenue models.

I’m taking an in depth look at the online video landscape in India and how it’s different to most online global markets. We’ll see who the people engaging online are, what it is they’re doing online, and how they access internet. More specifically I want to take a look at how, if at all, online and mobile video is being consumed in India and attitudes to online advertising and why the opportunity for digital growth in India is one of the largest in the world. In part one I’ll be focusing on the Indian internet audience and discovering what access they have and what’s unique about their online habits – so let’s get started.

Let’s talk size

To be able to truly talk about the online market in India it’s essential to get some perspective on the size of the audience we’re examining. With a population of over 1.2bn people, India has the world’s second largest population behind China. Of those 1.2bn people only 243m use the internet and 185m do so on their mobiles. Whilst this means the majority are disconnected from digital, there are still a legitimately large number of individuals active online. An important factor to consider is the largest proportion of users are aged between 15 and 34 and engaged in online video. This is something that will be explored further in part two.

 

Issues dictating the current market

While age is an important influencing factor in online engagement, one that is perhaps even more influential is economic status and location. Current statistics show that while the total population of India is 1,264,360,000, a huge 857,195,000 of those live in rural areas. With urban dwellers having the best connectivity and highest share of wealth, it is that minority of Indians that is ‘plugged in’ to e commerce. As mobile and desktop technology becomes more affordable and broadband speeds increase, more of those in rural areas will slowly start to gain access to the internet, using the technology to search, engage in social media and watch online video. For now though, the wealth divide is certainly accountable for the lack of Indian families and individuals able to use the internet and it won’t be until that wealth is more widely dispersed that we will see a majority population participating in the digital market.

India is ‘notable as the third richest country in the world with a GDP (PPP) of well over $5 trillion. Yet, this country also struggles with wealth inequality, gender inequality and city slums. According to data reported in 2010, over 68% of India’s population lives on less than $2 a day, and during the last decade over 28% of the country’s whole wealth was held by the top 10% of the population. India is home to some of the world’s wealthiest billionaires, and the country’s economy is expanding.

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From little things big things grow

One of the unique things about the way Indian audiences access the internet is that shared-access is almost as prevalent as work and home internet access, meaning a lot of people are going to internet cafes and hubs to get online. It’s a matter of access, broadband speeds and, as mentioned above – income that dictates the ability for users to participate in the digital economy. This may be one of the indicating factors as to why although internet users between the ages of 15 and 34 is very dominant in India, the amount of time that all users are actually online is far less than markets across the globe. If you need to leave the home or workplace to access internet, then it would be logical that you would be spending less time online than those who can connect wherever they are, whenever they want.

As broadband becomes available to more people and network speeds increase, and more affordable smartphones and tablets are marketed to poorer classes, the amount of users, and importantly, time current users spend online is predicted to increase. So while right now internet users may not be interacting the way most leading economies are, it’s a very opportune market and one that will expand rapidly as smartphones become affordable and reliable networks are provided along with other mobile infrastructure.

From users to devices

So far I’ve spoken about the audience in India, who is connected and how much time they spend online but the other important factor is the devices they use.

While a large proportion of India’s internet users are connecting via their mobile, the device itself is worth taking a closer look at.

A whopping 70% of page views come from mobile devices and an even bigger proportion of Facebook users are accessing their favorite social network via their mobile device. It’s not a surprising statistic but when we go back to looking at who and where these audiences are, it’s easy to see how these numbers could skyrocket within the next few years.

Investment in mobile infrastructure within India could mean more people have access to basic internet via their devices and those with higher incomes, will start to make more frequent use of trending mobile uses such as retail.

While there are currently 886 mobile subscriptions/connection in India, only a small amount of these are smartphones and even less have 3G connections. According to Nielsen’s report The Mobile Consumer, only 10% of Indian phone users have a smartphone and 80% have basic feature phones.

This means the online activities that most users are able to achieve on their phones is minimal.The good news is that the cost of smart devices in steadily decreasing and internet speeds are being improved so the wider adoption of smartphones and data plans is coming.

Progression, innovation, affordable tech

In my next blog on online activity in India I’ll be looking a little closer at how devices impact the market, what content is most popular, interaction with online video, and the kind of advertising used as well as attitudes in response to online advertising that exist.

We will consider what  the landscape might look like when technological infrastructure is put in place because with innovations such as Google’s Project Loon already happening, widespread connectivity could be a reality sooner rather than later – at least, that is the hope.

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