This article originally appeared in the March edition of our quarterly magazine. To get the full experience, you can read the issue online here, or subscribe to receive a physical copy here.

Its hard to ignore the rapid growth of video marketing on mobile over the past year or so. According to the IAB and PwC, ad spend on mobile video in the UK nearly tripled in the first half of 2014 to £63.9m, making it the single fastest growing digital ad format. Looking ahead, Forrester predicts that online video ad spend in Europe will grow at a CAGR of 20 per cent between now and 2019.

Unsurprisingly, many of mobile advertisings biggest names have followed suit. Last November, Mark Zuckerberg announced that: “In five years, most of Facebook will be video”, and 2014 saw major video acquisitions by Facebook (LiveRail) as well as Yahoo (BrightRoll) and Google (mDialog). This year, Google has introduced viewability reporting to its video campaigns for the first time, and announced completion rates of up to 74 per cent on its premium video marketplace, Partner Select.

The exact reasons why this growth is happening now depend on who you ask. From the consumers perspective, its mainly a case of mobile video becoming a viable option, according to Forrester’s principal analyst, Thomas Husson. “The basic drivers are now in place for people to spend time watching video and TV on their smartphone: 4G, data bundles, much more mobile-friendly content,” he says.

As for publishers, says Husson, its primarily due to the higher CPMs offered by video. “Its a new way to monetise increasingly mobile audiences, rather than relying on static banners that are forced to fit on a small screen.”

And for the advertisers themselves? According to Claire Valoti, UK head of agency relations at Facebook, it’s all about the story. “Video allows for much richer storytelling, combining sight, sound and motion, and providing a bigger opportunity for brand-building, emotional resonance and loyalty,” she says.

Commercial break
There is another potential reason for the rise of video marketing: familiarity. “Video is actually easier for brands to get their heads around,” says Zac Pinkham, MD of mobile ad platform Millennial Media. “If theyve not done mobile before and you start talking to them about rich media units and interstitials and swipe, they can get a bit lost. But all major brands have been creating video assets since the advent of TV.”

Jay Shiller, senior director of video advertising at Microsoft, agrees. “Buying an ad that shows in front of a video or as an interstitial is essentially like a commercial break on TV,” he says. “Thats where most advertisers comfort zone is.

“For now the critical mass of spend on digital video is very much coming from the big TV spenders. They already have the creative and have made the investment, they are very focused on reaching users with that same message regardless of what device theyre on.”

Different environment
“If youre just translating the TV content onto mobile then thats very easy for brands,” says Millennials Pinkham. “Theyve already got those assets, so its not like they need to build a load of new creative.”

But mobile is a different environment to TV – not least because the majority of content being presented isnt video, which can lead to users being actively put off by auto-playing ads. (See ‘Auto Turn-off’ panel.) Besides, does a piece of creative designed to grab the attention of someone sat on a sofa on the other side of their living room really work for a commuter craning over a 6-inch screen on the top deck of a crowded bus?

“The underlying creative asset, whether its 15 or 30 seconds or some longer form, I think works,” says Shiller. “What digital ads offer is the ability to reach the widest variety of users across devices, whether theyre on their smartphone during their commute or on the go at weekends, on their desktop during the workday, or on the Xbox at night.”

“TV advertisers already understand how to tell great stories using video,” agrees Pinkham. “What we bring is the ability to reach the right people and then add interactivity over the top.”

This might mean taking a beer commercial and overlaying it with a map that shows where the viewers nearest pub is, or adding browsable hotspots to an ad for a car that enables viewers to explore individual components in more depth.

“We encourage people to always incorporate these elements in their video ads, and make it a lean forwards experience rather than lean back,” says Pinkham. “The great thing for FMCG brands in particular is that this means the video ads can link straight through to purchase.”

Channel 4 is one publisher currently leveraging this kind of interactivity, having brought its iVOD interactive ad formats to mobile for the first time last year.

For now, the broadcaster offers only a limited selection of the units available on desktop, restricted to the 4OD iOS app, though this is being expanded as time goes on. One of the most recently introduced formats is Ad Elect – first launched on desktop in 2011 – which gives viewers the chance to choose from a small selection of creatives from the same advertiser, to better suit their interests.

Major focus
Smartphones and tablets together make up around a quarter of traffic to 4OD but, vitally, half of the services 11m-strong database of registered users signed up on mobile.

“Our viewers tend to skew a little younger than other broadcasters, so mobile is a major focus for us, especially as a future planning piece,” says Channel 4 digital lead David Amodio. “Weve seen a growth in demand for snackable, bite-size content on mobile and have started to create content specifically for the platform.”

This has led to the creation of Shorts, a set of original videos, each less than four minutes long, exclusively produced for 4OD. Channel 4 uses the shorts as a testing ground for new talent, and to promote its existing programmes with added content and Best Bits highlights. Fascinatingly, though, Amodio tells us “its the branded content that has actually produced the highest numbers”.

The broadcaster has partnered with three brands on its 4OD-exclusive content marketing: British Gas, Rimmel and Alfa Romeo. The last of these has been the most successful so far, with the resulting Guy Martin’s Passion for Life series commissioned as a full 30-minute show which aired on the channel last December.

This kind of digital-exclusive content seems like the way forward for advertisers who want to make the most of mobile video, and its proved especially popular on social networks like YouTube, Twitters short-video platform Vine, and Facebook.

“Whether you’re a global brand, a journalist in the field or a public figure sharing a part of your life, posting raw videos that are compelling, shareable clips that no one else will have is the best way to reach your audience,” says Facebooks Valoti. “Creative content is king on Facebook, so our Creative Shop team collaborates with agencies and brands to help them develop content that is every bit as useful, powerful and engaging as the content people already see from friends and family in their News Feed.”

Valoti points to Lucozades Conditions Zone campaign, which ran on Facebook during the World Cup, as an example of this creative approach. The ads recreated Brazils weather conditions on a five-a-side pitch in London and used Lucozade’s football talent, including Liverpool and England star Steven Gerrard, to showcase the impact of heat and humidity on performance.

The ads were delivered across mobile and desktop, to 16-34 year old males with football-related interests, as well as anyone talking about football-related content on Facebook. With a reach of 4.1m people, the video attracted 1.3m views – a view is registered only when the video remains on the user’s screen for longer than three seconds – and contributed to a 12 per cent increase in sales for Lucozade over the period.

“Digital video gives advertisers the opportunity to do something that always proved very difficult on TV: to more accurately measure interaction, engagement and, ultimately, conversion,” says Valoti. “We are able to observe behaviours, track conversion and accurately marry up people’s behaviour with their ultimate purchase.”

Rapid growth
So given the rapid growth in digital video consumption, could it potentially dethrone the traditional king of media? According to the Standard Media Index (SMI), US TV spend dropped by two per cent year-on-year in Q4 2014, and by as much as 9 per cent between October 2013 and 2014. With spend on mobile video surging, its possible that it is cannibalising some of TVs market share.

“There is a strong relationship between lower TV ratings and associated ad dollars and the dramatic increase in mobile advertising,” says SMI chief commercial officer James Fennessy. “Advertisers need to find new ways to reach the 18-34 demographic, since the fact is, that they watch a lot less linear TV than their parents did.

However, Fennessy says, there is still as much – if not more – appetite from these younger audiences for quality content, and as long as TV broadcasters continue to produce programmes like Breaking Bad and Mad Men, theyll stay ahead of their digital equivalents. Whats more, the advent of online streaming has helped them reach entirely new audiences. “Mobile definitely complements and expands traditional TV’s reach and producers of high quality content are in a terrific position to capitalise on this market dynamic,” he says.

“We’re not suggesting digital video replaces TV ads,” Valoti agrees. “Rather, there’s a big opportunity for brands to use digital video content to complement and amplify their TV campaigns around the clock.”

As the old maxim goes, no one was ever fired for buying ads on prime-time TV – and that looks likely to hold true for the foreseeable future. But with ad formats, creative and the supporting tech all evolving at a rapid pace, perhaps we’re not too far away from the day when the same can be said about a well-placed video ad on mobile.