Marketers will spend 56% more on digital video advertising this year, lifting expenditures to near $6 billion from $3.82 billion in 2013. But while spending in the channel will continue to increase and top $11 billion in 2017, its growth rate will decline to under 14% within five years.
The reason, according to a study released this week by eMarketer, is the proliferation of cheap mobile inventory. “Though video advertisers are following the broader trend of shifting dollars to mobile devices, mobile video ads actually suppress overall spending,” says the report, noting that videos on smartphones are shorter and less expensive than desktop presentations.
YouTube will command 19% of the video spend with estimated revenues of $1.1 billion in 2014, and eMarketer predicts its share will hold steady over the coming years. But the research company predicts that video marketers will continue to favor publishers that place ads against premium video content. It forecasts 18% growth for AOL in the segment this year, and it expects Yahoo to reverse a two-year decline in its video revenues with the success of its Adap.tv ad platform.