• by Dan Mosher , June 21, 2011

The mobile video market has grown so rapidly over the last six months that it has caught a lot of folks off guard.  As a result, research firms such as eMarketer are underestimating current and projected mobile video advertising revenue by a significant factor. Most of these firms expect revenue from mobile video advertising to hit $50 million for the 2011 calendar year, but I believe this number could be closer to $250 million. That's five times current industry expectations.  

Two major factors have led to mobile advertising projections that are totally off the mark: 

1) The proliferation of two monster platforms. Even 12 months ago, nobody thought Apple's iOS and Google's Android would be as widely adopted as they have, but the stats for both are staggering: Android apps have been installed more than three billion times, Apple passed 10 billion downloads in January, and more than 350,000 Android devices are activated every day, according to TechCrunch.

What's more, Apple reported in its Q1 2011 earnings that it sold 16.24 million iPhones and 7.33 million iPads during the quarter. As a result of this rapid adoption, there has been a huge influx of mobile video inventory over the last six months.

2) Buyers getting in the game and moving past test budgets. Ad buyers realize that consumers are increasingly flocking to these devices, and are no longer being tentative with their spend. Now that video can be delivered reliably on mobile devices, advertisers can deliver campaigns with sight, sound and motion to a huge installed base. For the last few years, mobile advertisers were stuck with boring static banners, and some very limited rich-media ad units. Today, buyers can deliver a video ad for mobile that's very similar to what they'd use for TV and online, without spending a tremendous amount of additional creative effort. In addition, mobile is now available on video exchanges, which gives access to a whole new set of mobile buyers.

It's been exciting to see how quickly the mobile ad industry has ramped up. We're still only in the second inning of a very intense, nine-inning game. Given the rapid growth by the top players in the space, $250 million is not an outlandish industry projection for 2011. Hopefully, research analysts will recalibrate their forecasts at the end of this year and make them in line with reality. We'll all want to be prepared for 2012. The way these hits keep coming, we could be in store for a half-billion dollar year.