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Mobile video will have substantially more ads in the future

Specifically, CBS receives 10% and 20% more per viewer when people stream watch their shows online. Poltrack notes that CBS can receive more because online advertisements can't be skipped with a DVR.
By
July 6, 2014
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Recently at a conference, CBS chief research officer David F. Poltrack spoke about how CBS receives more ad money when a person watches a show online than it does when a person watches the show on a television.

Specifically, CBS receives 10% and 20% more per viewer when people stream watch their shows online. Poltrack notes that CBS can receive more because online advertisements can’t be skipped with a DVR.

According to a study put out in October by Adap.tv, 86% of brands expected to increase their spending on video ads in 2014. Advertisers in the US are expected to spend $4.2 billion in 2013 with that number expected to rise to $12.7 billion in 2018. While impressive that number is still quite small compared to the $66.4 billion advertisers spent on TV in 2013.

MobileRevenue2013

CBS is not alone. The New York Times, Buzzfeed, AOL, Yahoo and others  are all planning to add money into original online video content and will include ads in such content.

“While Americans are indeed watching a record-breaking amount of online video these days, publishers’ decision to create more video content has as much to do with appealing to potential advertisers as it does appealing to readers. That’s because video ads are some of the most valuable, and expensive, advertising inventory the web has to offer.” – Business Insider

One of the biggest challenges to the online video advertisement business continues to be services such as Netflix or Amazon Prime since a customer does not have to deal with advertisements (though they do pay a monthly/yearly fee).

eMarketer estimates that:

  • Online video ad spending will total $4.52 billion in 2014 for desktop digital video ad spending,
  • Online video ad spending will total $1.44 billion in 2014  for video ad spending on tablets and smartphones.
  • Online video ad spending will only slightly outspend mobile video by 2018 but that the figures will be significantly more closer than now.
mobile share of online video

Several months ago, Facebook launched Premium Video Ads, which allow advertisers to purchase 15-second video ads that expand to full-screen if a user clicks on them. Facebook has also recently acquired a video ad tech startup, LiveRail, in the hope that they can target over 7 billion video ads to visitors per month.

US adults now spend 40 minutes more each day on their mobile devices than on desktops and laptops.