Posted June 6, 2013 6:35 pm by with 1 comment

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mobile adsMobile advertising can be tricky. You’re dealing with smaller screens, shorter attention spans and limited bandwidth in some cases. None of that has stopped YouTube from tripling their mobile ad sales in the last six months. Bloomberg estimates $350 million in revenue. That means mobile is bringing in between 20% and 25% of YouTube’s yearly revenue. Not bad for a such a new and “hard to monetize” product.

The success of the program is coming from two elements. First, YouTube app usage has gone through the roof.

More than half of smartphone users in the U.S accessed YouTube’s application in March, according to Nielsen Holdings NV (NLSN). At least 70 million people in the U.S. were on the app in March, up 42 percent from a year earlier, the researcher said.

YouTube also made a change on the backend that makes it easier for advertisers to split their budgets across a both platforms.

Consumers are spending more time and money consuming digital media and entertainment. AdAge says that by 2017, online entertainment purchases will account for 43% of all media spending. In dollars, that translates to  $632.1 billion. Last year, online media spending only represented a third of the pie. At this rate, it won’t be long before the entire ecosystem has flipped with hard copy purchases coming in at only 30%.

But it’s not just video and music. Consumers are also making the shift from print to digital be it ebooks or digital magazines.

Look at this chart from eMarketer:

ipad advertising

iPad ad units aren’t exactly selling like Red Bull at the X-Games but at least there’s growth. Print ad sales have nearly flat-lined.

Here’s more good news for digital dealers; ebook sales rose 44.2% in 2012 to $3.04 billion. Print book sales also flat-lined. In adult fiction alone, ebook sales in 2102 rose 41.8% over the prior year.

Digital is in and tough or not, we have to keep finding ways to advertise on mobile. That’s where people are watching short form video. That’s where they’re streaming their favorite TV shows. That’s where they’re reading the latest best seller. But to make this work, we have to go behind the old fashioned ad banner. We need to find new ways to integrate advertising with the products in a way that is entertaining, informative and minimally disruptive. That could mean more product integration or more sponsorship deals.

Imagine a hot romance novel sponsored by Cover-Girl or an international thriller sponsored by British Airways.

There are ways to make this work for everyone, we just have to start thinking inside the smaller, mobile box.


  • Aaron Mahl

    Definitely not surprised. I would probably say, based on my experience and everyone I know in this business, video is the hottest mobile ad format. YouTube is going to make a killing if they keep up efforts to push video ads in an engaging and, ideally, targeted way. Why do you think ad networks like Millennial Media and Airpush are making huge gains against a very competitive backdrop of other ad networks? They have the best video ads (and rich media) which makes their ads more effective and profitable for devs. Video is going to make a lot of developers a crap ton of money this year.