Commentary

Mobile Drives Ad Spend & Content Creation, But Hurdles Remain

While ad spending on digital video will continue to rise in the next few years, much of its growth will be fueled by mobile as well as by social media and on-demand viewing.

These are among the findings in a just-released state of the industry report from video platform Ooyala.

To set the stage, consider these underlying statistics about the digital video arena. U.S. digital video ad spend should reach $28 billion by 2020, up from $9.9 billion this year, eMarketer has said. In addition, 63% of media buyers plan to spend more in general on all of digital video, while 62% specifically noted plans to increase money in mobile video, the Interactive Advertising Bureau found. Those findings dovetail with the new Ooyala report.

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“It’s no surprise that mobile screens, with their always on access and portability, are rapidly becoming the first choice for digital content viewing,” Ooyala said.

Video plays on tablets and smartphones, whose usage have grown at more than 116% compound annual growth rate since 2011. Meanwhile, desktop Internet use will likely have peaked as of last year and is now dipping in favor of mobile, the report said. The spending gap between the two is closing as well, and Ooyala said that many media companies such as Hearst and CafeMom are launching content on small screens first.

Expect to find even more of this type of programming as the under-21 generation receives increasing attention from marketers and programmers. This younger generation spends much more time on smartphones and tablets than millennials do, the report said.

What's more, Parks Associates found that about seven in 10 Americans watch a short video on their phones each day. Meanwhile, 20% of mobile video viewers spend a half hour or more watching short-form videos, such as music videos or YouTube clips.

This all sounds well and good, but the road ahead will be paved with some potholes. One of the biggest is the growth in ad avoidance technology. About 20% of smartphone users now block ads on their mobile Web browsers, a 90% increase over the year before, according to PageFair, a technology and analytics firm.

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