As consumers shift toward a mobile-first lifestyle, advertising revenue is following in their footsteps to better reach them, according to a new report from the Interactive Advertising Bureau. 

The Internet Advertising Revenue Report claims that mobile ad revenue has had a 76 percent increase year-over-year, bringing in about $12.1 billion dollars in 2014, compared to $7.1 billion in 2013. Mobile advertising is now the second-largest format in which marketers are investing in for digital advertising, and constituted 25 percent of the full year revenue from last year.

"The increase in mobile ad revenue is driven by advertisers investing more in the mobile channel due to the increase in consumer time spent on mobile," said Guillaume Lelait, general manager at Fetch, San Francisco. "Time spent on mobile recently surpassed time spent watching TV and adults spend an average of 2 hours and 57 mins daily on a mobile device according to a study conducted by Flurry.

"Additionally there is now greater transparency in mobile ad spend and better targeting from media owners," he said. "Advertisers recognize that mobile can no longer be treated as an afterthought, rather they must see it as a critical channel for driving business dependent on their industry.

"Advertisers should invest strategically in mobile with a nimble testing strategy centered around mobile consumer behavior. Being ready to iterate quickly as the space constantly evolves and changes more than other channels." 

Social media advertising is also rising in profits, bringing in $7 billion last year, jumping 57 percent since 2013. The report also showed that digital video on desktop and mobile is still a star in advertising, attracting consumers with storytelling abilities.

Mobile shift
These numbers are likely to increase with consumer behavior shifting more and more each year towards mobile. It is probable that the addition of new mobile devices will continue to increase the mobile shift. 

Advertisers are fully aware of this, which is why revenue is being shifted further towards mobile and social media. It is important to access consumers where they are located, and mobile satisfies that requirement. 

Digital video increased since 2013 by 17 percent, bringing in $3.3 billion in 2014, compared to $2.8 billion in the previous year. Advances in video technology drew in more consumers who are attracted to visual and narrative content.

While viewing video through mobile is gaining simplicity now, as well as digital video, ad revenue will only increase. 

"The area of growth we have really seen over the past few years is mobile video," Mr. Lelait said. "Recent projections have stated that mobile video ad revenue will grow 3x faster than that of desktop through 2020. 

"Mobile video far outperforms standard display units," he said. "At Fetch our video campaigns have seen upwards of 40 percent CVR, for app install campaigns."

New social media platforms and applications are being released often, and with each new tool, consumers become better-connected. This opens up an opportunity for brands to connect to them as well, accounting for the increase in revenue in the social media format. 

This will also likely continue to grow as more and more time is spent on social media and new apps are released and updated. 

Digital ad revenue in general rose to a record high of $49.5 billion in 2014. This is a 16 percent increase since 2013 which had $42.8 billion in revenue, another record. 

The fourth quarter in 2014 showed $14.2 billion in revenue up 17 percent from the final quarter of 2013 which had $12.1 billion in revenue. 

Display-related advertising accounted for 27 percent of the revenue in 2014 with $13.5 billion increasing five percent since the previous year. 

Modifying marketing 
Additionally, marketers? advertising spend on smartwatches is expected to reach a total of $68.6 million in four years as the wearables sector becomes permeated by top technology brands such as Apple, as well as more fashion-friendly retail brands, according a recent report from Juniper Research (see more).

Advertising through social media and mobile can be highly beneficial to brands and retailers if done with appropriate content. An executive with The Recording Academy, the organization behind the Grammy Awards, stressed the importance of creating shareable marketing content for mobile and the significance of quality over quantity during a session at Forrester's Forum for Marketing Leaders (see more).

"Additionally, all the main social players have introduced video-ad products for marketing purposes and investing dollars in social has major advantages such as scale, advanced targeting and native ad units," Mr. Lelait said. "However, one thing advertisers should keep in mind is repurposing video content for TV or other channels for the mobile device will not produce high ROI. 

"People have internalized mobile as part of their personality but rarely do they spend more than a few seconds interacting with mobile web," he said. "Mobile videos must grab viewers? attention within the first five seconds. 

"We have found that 30-second videos show the highest conversion rate, while 15-second videos also highly effective."