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The adage over the past several years has been that analog dollars become digital dimes, which then become mobile pennies. In 2013, mobile ad spending reached an estimated $8 billion to $10 to billion in the U.S., which is nearly double the 2012 total, but still a mere fraction of the $100 billion total Internet ad market. As attention shifts away from the desktop, mobile advertising has lot of catching up to do.

Next year, I predict video ads will be a major area of growth for mobile advertising. Likewise, as app publishers fight to keep users engaged, the market for app re-opens will flourish. Facebook and Google will likely continue to dominate this market, and smaller players will consolidate. Below, I’ve outlined my top five predictions in more detail.

(Full Disclosure: Greycroft has made several bets in advertising and mobile startups, including Collective Media, Buddy Media, 33Across, AppAnnie and mobile platforms Highlight, Venmo, Pulse, Viddy, Scopely, Layer, Fortumo and Plain Vanilla/QuizUp. I am also a small private investor in Facebook and in Vungle.)

1.) Video ads will dominate.

Short-format, punchy video ads that last five to 10 seconds will become the preferred ad units over 150×20 text placements. They’ll benefit from larger screens, too.

The predominant format for mobile ads through 2013 has been highly ignorable, small mini-banner ads at the top or bottom of a screen within an app. Mobile advertising 1.0 companies like AdMob, Quattro, Millennial, and Greystripe popularized these formats.

But these units were designed in the early days of smartphones, when operating system speeds, screen sizes, and screen resolutions were not what they are today. The current era of devices feature HD-quality screens and lightning-fast operating systems. This makes richer, more engaging, colorful display advertisements and short video ads possible. Video ads are better-suited to the new form factors available, are an accepted format in which agencies & brands already create ads currently for both television and desktop, and offer both the user and the advertiser a better experience than banner or text ads. I believe they’ll grow faster than mobile banner or text ads next year. The main companies in this area currently include AdColony, Vungle, and Rhythm and rich media mobile ad companies Celtra and Crisp Media.

2.) App makers will pay to re-engage existing app users.

The markets for building new mobile apps and paid app installs have both matured. The next logical step is to get users to re-open those existing apps on their phones. That market is flourishing.

For the past four years, every brand and publisher was pushing to first build an app and market it aggressively, capturing as many downloads and installs as possible. But apps are expensive to build, costing anywhere from $25,000 up to $250,000 or more, and cost-per-install ad campaigns are extremely competitive, costing anywhere from $1 to $3 per download. (Of course, the best apps have organic, viral growth and don’t need to pay for installs, but even popular apps pay for at least some marketing.)

Companies like TapJoy, Flurry, SponsorPay, w3i and others have been helping mobile developers get their apps installed through targeted campaigns and “offer walls,” which reward users who download a new app with virtual currency or some other benefit. But despite all the effort and expense, more than 75 percent of apps are only opened seven times or less after they’re downloaded.

Publishers and brands are wasting a lot of money getting downloads which are ultimately ignored. To combat this, a whole host of emerging companies including AppBoy, Urban Airship, Appoxxee, TapCommerce, ActionX, Kahuna, URX, and others are trying to solve the re-engagement problem through various forms of customer management and retargeting messages. I see this area remaining a big focus within mobile ads in 2014.

3.) The rich get richer.

In terms of revenue, the single largest mobile ad platforms in 2014 will be Google and Facebook.

In the third quarter of this year, nearly half of Facebook’s ad revenue came from mobile, an area that made up none of Facebook’s income just a year ago. That figure will continue to expand next year. The sheer volume of Facebook’s traffic and audience – 1.2 billion active users and more than 700 million on mobile – means they will be very difficult to beat when it comes to mobile monetization.

Moreover, Facebook’s recently introduced video ad units will run on mobile devices as well. As such, I believe Facebook’s revenue next year may eclipse $5 billion on mobile alone. Meanwhile, Google, given its tremendous scale, rapid growth of its Android platform, and mature AdWords/AdMob-based mobile ad products, will likely see even better numbers, potentially reaching $6 billion to $10 billion in mobile ad revenue (including mobile search). Major competitors in the mobile ad market like Pandora, Twitter, Millennial Media, Apple iAd and others will continue to trail Facebook and Google in the market.

4.) A wave of consolidation is coming.

There are probably a dozen different mobile adtech companies serving each major segment of the market, including rich media ads, video ad networks, DSPs, advertising exchanges, retargeting/messaging platforms, and ad attribution and analytics platforms. At all levels within advertising – including mobile ad-tech – scale and size matter tremendously. Why? Most major brands and agencies want fewer vendors to deal with and fewer point solutions for each feature they need; they’d rather not deal with 10 vendors when they can get it all from one. And they want to do it all at scale.

As such, I think many of the smaller companies in the ecosystem will have to combine, or become part of bigger platforms. The Kontagent-PlayHaven deal is just the beginning. I wouldn’t be surprised to see some of the bigger ad platforms that got their start with desktop advertising, like Tremor, BrightRoll, or YuMe, picking up mobile assets, or to see mobile-only companies joining forces. Mobile ad network InMobi has already made several smaller mobile acquisitions, including Overlay Media, Appstores.com, and Sprout.

5.) We will see the the first billion-dollar mobile adtech exit

Ok, maybe not this year. It’s possible in late 2014 or early 2015 we’ll see the first billion-dollar mobile adtech exit. Candidates include Flurry, HasOffers, Celtra, Airpush, AdColony, InMobi, Mojiva, Smaato, Nexage, Vungle, Drawbridge, and TapAd. Many of these companies are currently valued between $100 million and $500 million.

Yes, Millennial Media did see its billion-dollar public market debut quickly decline to a $581 million market cap. However, this past year MoPub was bought by Twitter for $350 million, which valued the company by some accounts at nearly 10 times revenue. With the mobile ad market doubling year-on-year and many of the companies above experiencing growth rates greater than that, it’s possible that one or two could get to $100 million in revenue with a valuation multiple similar to MoPub.

[Illustration by Hallie Bateman for PandoDaily]