Feature Article

May 16, 2013

Mobile Video Ad Spending Set to Triple in 2013

Mobile video is gaining steam, paving the way for it to command premium ad rates. In fact, eMarketer’s “Mobile Video Advertising: Choices for a Rapidly Changing World” report estimates mobile video will account for $520 million in ad spending in the U.S. this year, or 13 percent of the entire digital video ad market. That’s a triple-digit increase from last year.

And it’s growing: ad spending for mobile video is set to quadruple to nearly $2.1 billion in 2016—a figure that will represent more than one-quarter of all digital video ad spending. In fact, growth rates for mobile video ad spending will be far greater than for any other related channel—television, online or total digital.

eMarketer points out that this year’s triple-digit growth does not mean that mobile video is becoming the dominant video ad format or even the dominant mobile ad format (it’s still less than 10 percent of all mobile ad spending, which includes banners and static ads). It does, however, indicate “market energy and advertiser interest,” which is high thanks to the ability of mobile devices to also be personal devices. And, video consumption on mobile devices is up significantly—often within the home.

“Mobile’s not going anywhere,” said George Haynes, social and digital media manager at Kia Motors America told eMarketer. “We see it as the most personal connected device that people have. In a lot of ways, it’s just up to us to figure out how to connect in the right way.”

But not all mobile devices are created equal when it comes to ad engagement. In a recent report on the mobile video ecosystem, BI Intelligence uncovered that tablet users tend to have higher ad conversion rates than those on smartphones.

Tablets, in fact, are increasingly at the center of the mobile video consumption trend, thanks to a larger screen and lean-back usage. BI saw that two video-related activities — playing videos and sharing them — are among the top 10 favorite things to do for tablet users. For smartphone users, neither activity makes the top-10 list.

Among younger viewers in the U.S., millennials aged 14 to 23, mobile video on tablets is nearly as popular of a medium for watching TV shows as Blu-rays or DVDs: 25 percent of millenials said they watch TV shows on tablets every day or weekly, compared to 24 percent who do so on DVD or Blu-ray.

BI also said that tablet owners are far more likely than the average U.S. consumer to cut the cord and go with Hulu, Apple TV, iTunes, Netflix or Google TV instead.

Edited by Alisen Downey

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