For starters, mobile video advertising is on pace to more than double this year, making it the fastest growing area of advertising, eMarketer said in a just-released report. Mobile video ads will grow 119% this year to $1.44 billion, and that compares to a strong 26.4% growth rate for online video ads, which will generate revenue of about $4.45 billion this year. In addition, the growth rate in mobile video ads will exceed traditional online video ads on desktops or laptops. By 2018, mobile video should hit $5.44 billion in revenue, putting it close to online video’s $6.83 billion, the report said.
The reasons behind this growth are twofold. First, buyers are shifting some money from TV -- about 15% of ad buyers said they’re moving money to digital. The second reason lies in the audience. Smartphone and tablet usage are skyrocketing and as penetration grows, so does video use and ads on those devices, especially on tablets, eMarketer said.
At the same time, consumers still like watching TV on their own terms. In its latest cross-platform report, Nielsen said that more than 60% of U.S. homes have video-on-demand and nearly 40% of U.S. TV homes subscribe to at least one subscription video-on-demand service. VOD is particularly popular among younger users, and on average contributes about 4% to 5% of overall viewing in the 18 to 49 demo, Nielsen said.