For Google, other providers, online advertising morphs toward a mobile audience

As the online advertising market continues to change, Google (NASDAQ: GOOG) is changing with it. The search engine giant, which relies on display and video ads to generate 90 percent of its annual revenue, said it is changing the size of the ads at the top of its search pages, The Wall Street Journal reports. The move, in part, reflects online users' continuing shift to mobile devices, and providers' efforts to keep up with the change.

Google executives told WSJ that with more than half of all searches taking place on smartphones, the ad revamp was necessary to catch the eye on smaller screens.

Indeed, mobile advertising has already taken a strong position in the digital advertising market and will be part of a combined $7.34 billion spent on both desktop and mobile in 2016, eMarketer forecasts.

Spending on digital advertising continues to climb steadily, and is forecast to reach $4.05 billion by the end of 2016, up from $3.45 billion in 2015, eMarketer reports. Furthermore, mobile advertising is taking a strong position in the online ad market, reflecting changes in consumption.

eMarketer video ad channels

Source: eMarketer

The forecast comes as Ooyala also dropped a whitepaper on the state of the media industry, noting that "The gap between mobile consumer usage and advertising spending is slowly closing as well, as the viewing experience and personalized targeting abilities for mobile improve."

Part of that is due to the increase in mobile-first online video streaming such as Verizon's (NYSE: VZ) go90 and T-Mobile's (NYSE:TMUS) Binge On service. But other media publishers are getting in on the mobile-first act as well, with many traditional outlets partnering with video and content providers to reach this audience.

Ooyala noted that media companies are getting more creative about how their content is presented online. For example, Vice Media and Apple Music partnered this spring to produce a six-episode original series called The Score -- where music from each episode will be available on an Apple Music playlist.

Such efforts mean that advertising methods are getting more interesting, as well -- cross-platform ads, for example, can target an audience more closely; while "native video ads that closely align with owned editorial content are becoming a select method for publishers looking to avoid ad blockers, satisfy brands, and curate engaging experiences for their audiences," Ooyala said in its report.

Additionally, mobile video programmatic advertising is expected to increase, from around $1.14 billion in 2015 to $3.79 billion by 2017, Ooyala said, citing an eMarketer Q4 report.

For more:
- see this eMarketer release
- see this WSJ article
- see this Ooyala report

Related articles:
Verizon's McAdam on Go90: 'It did get a little bit overhyped'
Mobile apps generate $34.2 billion in global revenue last year, IDC says
Report: Google exploring policy for 'acceptable ads'

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