Mobile video advertising is growing faster than any other digital advertising format, but research firm eMarketer says a lack of consensus over metrics and pricing between buyers and sellers is holding it back.
According to the latest eMarketer figures, mobile video in Canada is expected to grow 100.4% to $106.9 million this year, accounting for just over one third (35.9%) of all digital ad investment. The company expects it to account for 65.5% of all digital video ad spending by 2019, with total marketer investment of $345 million.
“As we move down the path, there will be increased investment in mobile for sure, and that correlates directly to time spent,” eMarketer analyst Paul Briggs told Marketing. “It’s about advertisers getting confident enough to invest in the mobile channel. It’s really a maturity story.”
However, eMarketer also said the current proliferation of mobile ad formats is leading to confusion among buyers, with some advertisers preferring to wait on the sidelines until clear winners emerge.
“Mobile is still an unknown commodity for a lot of advertisers, and they’re waiting to see how things will shake out,” said Briggs. He predicted Canadian marketers would watch to see how the mobile video market emerges in the U.S. and the U.K. before ramping up their investment.
According to eMarketer, other challenges that could potentially hinder mobile video’s revenue growth include uneven ad inventory and advertiser uncertainty over whether mobile web or in-app channels provide a better option for messaging objectives.
However, eMarketer said mobile video has a “long runway,” thanks to larger audiences and growing time spent on smartphones and tablets. According to a recent eMarketer report, Canadians have added 71 minutes a day to their daily media diet since 2011, with mobile a leading contributor.
Briggs suggested mobile video growth could potentially mimic that of social media channels. He said social media advertising in Canada has “progressed tremendously” over the past 18 months or so as companies like Facebook, Twitter and LinkedIn have invested in their advertising product.
“It’s going to be a very similar outcome in mobile video, with the companies that are big in the space – like Brightroll and Videology – investing very heavily in creating ad products that translate into results for brands, agencies and advertisers,” said Briggs. “That is something that’s going to come in the next several months.”
He predicted growth in the segment as large internet companies begin identifying major growth areas and acquiring leaders in those niches – such as Yahoo spending US$640 million to acquire the video ad platform BrightRoll late last year. “It’s not impossible, but it’s hard to imagine a pure-play video player growing up to be competitive with the big boys in the internet game,” said Briggs.
In its report, eMarketer said mobile video ads are engaging because of the interactivity of mobile touchscreens, the immersive full-screen video experience of mobile devices, and the perception that smartphones create a more intimate and personal video experience than desktop video.
The Canadian data coincides with a new U.S.-focused report, Mobile Video Advertising 2015: Video Viewing Goes Mobile, but Advertisers Aren’t Going All In (Yet), which said mobile video advertising in that country would grow more than 70% to US$2.6 billion this year. The report said growth figure was coming from a small base, and that mobile video is underperforming relative to desktop video.
The report predicts mobile video to account for 47% of total video ad spending in the U.S. by 2019.
