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Inside look at why mobile video advertising is growing fast

Last updated on August 14th, 2015 at 02:29 pm

There is no doubt that mobile video has already become the primary focus for the likes of YouTube, Facebook and Twitter, particularly when it comes to these brands’ respective ad efforts.

Recent research uncovered mobile video advertising is growing three times as quickly as desktop video advertising.

B2Bnn breaks down the numbers.

BI Intelligence Shows Massive Gap

A new study from Business Insider Intelligence revealed that the U.S. digital video ad revenues between desktop and mobile reached just under $5 billion in 2015. A five-year compound annual growth rate of 21.9 percent is expected in this niche, while total revenues will top $13.3 billion.

The other conclusion that can also be made from this data is that mobile video advertising is quickly taking over desktop video advertising in terms of importance and lucrativeness.

Within that 21.9 percent growth rate, mobile video advertising revenue is projected to soar 39.5 percent by the year 2020. Desktop video advertising is slated to just inch higher by 12.9 percent.

The Rise of Mobile Video

Take a look at these two statistics:

To say that mobile video viewership is rising dramatically would be an understatement.

Mobile videos have become an important tool in the arsenal of brands, advertisers and social networks. With the growing power of mobile devices, it was only logical that mobile video would complement the technology. And marketers have responded in kind.

Mobile video ad spending in the U.S. is growing faster than any other type of digital marketing. This year, advertisers will spend just under $3 billion, which represents about one-third of total digital video ad spending. The same level of success can be found in Canada.

Not only are more Canadians consuming video content on smartphones and tablets at an enormous rate; mobile video now makes up a quarter of marketing budgets as firms are going to spend just under $350 million per year by 2019.

Unfortunately, there may be some hiccups moving forward for the industry.

Challenges Over Mobile Video’s ‘Maturity’

Earlier this year, eMarketer released a report entitled “US Mobile Video Advertising 2015: Video Viewing Goes Mobile, but Advertisers Aren’t Going All In (Yet),” in which it wrote that advertisers still have reservations about mobile video ads.

There is a long list of challenges currently facing advertisers today. Some of them include disagreements between buyers and sellers over ad pricing and metrics; indecision of whether marketers should promote mobile web or in-apps channels; and uncertainty regarding ad inventory.

“There’s still some inconsistency with the ad formats for mobile video,” said eMarketer analyst Jeremy Kressmann in another report. “There’s in-stream video working off publishers’ native players; there’s interstitials that pop up; there’s in-app, in-game video; interactive video; in banner and in-feed video.”

There is one other worry that could prove a headache for brands: ad recall. Recent data suggest that ad recall for both desktop and mobile is high: 83 and 82 percent, respectively. Generally this is a good thing. But the concern is that ad recall is sometimes not something to celebrate over because consumers may be irked by the repetitive and pervasive ads they’re receiving.

For instance, a first quarter 2015 poll conducted by Aol found that three-quarters of mobile users were annoyed that they saw the same ad repeatedly, compared to two-thirds on desktop. Furthermore, 45 percent of respondents complained there were too many ads on smartphones and many of the video ads were too long. This is higher than the 33 percent of desktop users who cited the same thing.

“Mobile video is critical as delivery and consumption increases,” said Gian LaVecchia, MEC’s North America digital content marketing leader, in an interview with AdWeek. “The behavior is there, and the marketing opportunity is there, and we’re seeing interesting new ad formats. But it also has to reach a level of maturity.”

Facebook is getting into the act: The company announced Tuesday that it is offering auto-play video ads to its mobile ad network, allowing app publishers to add the same type of video advertising experience that consumers already know from Facebook’s apps and website to their own apps.

Final Thoughts

Although consumers are increasing the amount and length of content they consume, there are other factors that may very well hinder the further growth of mobile video ads in the short-term. Many of the wrinkles in mobile video ads will likely be ironed out and the questions will be answered. Advertisers aren’t going to risk losing out on the next big thing in the world of marketing.

Last month, MediaPost Communications proclaimed “next year will be the ‘year of mobile’: for video.” Let’s see if they’re right.

Photo via Vidcoin


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Andrew Moran
Andrew Moran
Andrew Moran is a full-time professional writer and journalist, who covers the areas of business, economics and personal finance. He has contributed to Benzinga, Capital Liberty News, Career Addict, Money Morning and PFHub.