Mobile Video Less Than Ideal for Advertising, Says FreeWheel

Thus, ad revenue isn't keeping pace with views

People are increasingly using their mobile phones to watch videos, but the ad revenue isn’t keeping pace. According to online video technology firm FreeWheel’s 2Q online video monetization report, out today, mobile made up 13.2 percent of all video views in Q2 but only 5.6 percent of ad views.

Why the lag? FreeWheel points to consumer viewing habits, measurement challenges and device fragmentation. Brian Dutt, part of FreeWheel’s advisory services team, said people viewing on a small screen tend to watch short-form content and for shorter sessions, not an ideal advertising environment.

“When we’re talking about mobile, we’re talking about a small-screen, short-form content, so the viewer is on the go,” he said. Add the challenges measuring audience on mobile and the multiple devices and screen sizes to create ads for and “it’s a harder form factor to monetize,” he added.

Regardless, online video viewing continues its double-digit growth, with views growing 38 percent in Q2 versus the year-ago period as TV everywhere apps and original digital content enables people to extend their viewing to multiple screens.

Most of the growth was in pure-play digital video, which was up 41 percent. Linear plus digital video (content released in broadcast as well as video format) was up 32 percent.

As for content length, shorter-form viewing is ruling the day; short-form content (less than five minutes) and mid-form content (15-20 minutes) grew at about twice the rate as long-form (20+).

If online video is starting to feel like TV, it’s because long-form ad loads rose 12 percent to 11.9 ads per stream in the quarter, as publishers seek to further monetize video content. (Ad loads are significantly less in shorter-form content.)

Ad length also is getting longer. The :30 ad most common in broadcast TV now represents half of ad views, up from 43 percent a year ago. Still, viewers are completing :30 ads nearly as much as they are :15s, which suggests the longer ad format hasn’t been a big turnoff so far.