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Ad-funded content drives mobile video

News, 06 July 2016

BOSTON: Ad-funded content will be the main driver of the mobile video market, according to a new report which projects worldwide revenue from mobile video to reach $25bn by 2021.

The study from research firm Strategy Analytics – Global Mobile Video Forecast: 2010-2021 – also predicts users of mobile video will more than double to 2bn users by the end of 2022, equal to a 36% penetration among global mobile users.

Mobile video revenue is broken out by business model, including sell-through, rental, subscription and advertising-funded, with the last of these driving two thirds of total market value.

"The strongest growth in mobile video revenue will come from advertising-funded content as advertisers look to catch up with the increasing quantity of video consumption," said Wei Shi, analyst at Wireless Media Strategies.

"Advertising spending on mobile video will grow at a 28% CAGR in the next five years," he added.

The report noted that social platforms with audience scale, like Facebook, Twitter, WeChat and others, are increasingly looking to video to increase user engagement rates while reducing churn.

"Despite growing video consumption on mobile devices, advertiser expenditure on mobile video has yet to catch-up with this growth," said Nitesh Patel, Director, Strategy Analytics.

"Furthermore," he added, "new modes of mobile video services such as live streaming platforms like Periscope and Facebook Live are focused on building audience before revenue.

"Currently, social networks have launched live video streaming as a tool to increase user engagement and to extend the time spent by users while inside of social networks, but we expect direct monetisation to follow."

A study of native mobile video ad effectiveness undertaken by Opera Mediaworks and comScore advised hooking users in the first 2-3 seconds, using quick cuts and close-ups, using oversized text, using call to actions and making sound secondary.

Data sourced from Strategy Analytics; additional content by Warc staff