Mobile Video Ad Spend Is Growing, Despite Qualms

Mobile video ad spending is growing faster than any other digital ad format. However, format issues constrains its growth.

According to a new report from eMarketer, U.S. mobile video advertising will grow more than 70% to $2.62 billion in 2015, more than one third of the estimated $7.77 billion spent on digital video advertising in the country this year. That number comes from a small base, though, and mobile video still underperforms as a share of digital video in comparison to desktop spending.

By 2019, the report says, mobile video ad spending’s share is expected to be 47% of total digital video ad spending, but mobile ad spending overall will reach 72% of total digital ad spending.

“Mobile video ad spend is experiencing rapid growth, thanks to larger audiences of video viewers and growing time spent on smartphones and tablets,” Jeremy Kressmann, eMarketer analyst and author of the report, said in a statement. “But challenges with the format are causing growing pains for the industry.”

Growing demand
eMarketer estimates that more than 105 million U.S. smartphone users will watch video at least once a month on such devices in 2015—a 13.9% increase over 2014 and 55.5% of the total smartphone user base. Tablets, too, are poised for growth; the report says that U.S. tablet viewers will continue to grow by double-digit rates in 2015—just eclipsing 100 million individuals, or more than 63% of all tablet users.

In 2015, U.S. adults will spend an average of 39 minutes watching video on mobile devices (i.e., smartphones and tablets) each day, accounting for more than half of the total 76 minutes of average time spent per day with digital video content.

Hindering growth
A lack of consensus over metrics and ad pricing between buyers and sellers is hindering mobile video’s growth, according to the report. The variety of mobile video ad formats is another problem, because it can lead to confusion among buyers who may prefer to wait it out to see which format emerges as the clear-cut favorite.

Other challenges include uneven ad inventory and uncertainty over whether mobile Web or in-app channels are the better option for certain messaging goals.

Positives
Mobile video does have a long runway and advertisers are integrating it into cross-channel marketing strategies, the report finds. They view mobile video ads as highly engaging due to the interactivity of mobile touchscreens, the immersive full-screen video experience of mobile devices, and a perception that smartphones create a more intimate and personal video experience than is found with desktop video.

“As consumers are becoming increasingly agnostic about the device they use to watch video, some advertisers are finding the most valuable strategy to be buying mobile video ads as part of broader cross-device campaigns on television and digital video,” Kressmann said.

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