Advertising Dollars (Finally) Follow Mobile Video Growth

Global ad spend is projected by Zenith Optimedia to grow by 4.4% this year — higher than the industry average of 4.2% and much higher than it has grown over the past ten years. By next year, it will grow by 5.3%, held back only by recession in Russia and a slowdown in China. Guess what propels the ad spend for 2015: the American election and the Summer Olympics in Rio.

Unsurprisingly, mobile video is fueling some of that growth.

Video ad spend will continue to explode, increasing 29% per year and reaching $23.3 billion by 2017….,While 29% is a decline from the 34% growth… for online video in 2014, the format is the fastest-growing digital ad category, partially due to mobile.

However, advertisers are cannibalizing their TV budgets to buy mobile video. We predicted that the apparent slow growth of mobile video ad revenues was merely a lag between the arrival of consumers and that of advertisers.

We predict that mobile video ad revenues will receive another shot in the arm by something Zenith Optimedia hasn’t had time to study yet: the spectacular arrival on the scene of live streaming video apps Meerkat and Periscope and the introduction of video to Snapchat. How Snapchat Discover and the two rival IOS  livestream apps will be monetized is still not certain, but all three underscore the power of video. Brands are already on Meerkat, and it’s only a matter of time before they hit Periscope, which just launched a few weeks ago.

Not to mention that neither Meerkat nor Periscope is available on Android, the world’s largest mobile platform, as yet. Dollars will be rushing to mobile video.

This should be good news for Facebook, which has bet big on mobile and has 1.4 billion monthly active users, and Yahoo, which has almost bet the farm on its mobile growth. It is less exciting news for Google, which hasn’t got much of a mobile ad strategy beyond its Android OS, and which built its business on search and display ads — both of which are suffering from the onslaught of video.

We’ve been focused on video for a year now with our inArticle format, which is being used in campaigns all over the world.  Much of our current thinking is about native mobile video, and reaching customers at scale.