InMobi has drawn up a strategy that will help it maintenance its profitability with video ads being front and centre. After ending 2016 at a net profitable level and operating on a profit this year as well, the advertising firm hopes to make much more profit this year with video ads accounting for over 50% of their ad revenue for the next three years.
“Globally, our revenues from video ads grew four times in 2016. It currently contributes 15-20% of our topline and will form over 50% of our revenue share, possibly by 2020,” Arun Pattabhiraman, global head of marketing at InMobi, told ET. “For us, investments in the category were (earlier) moonshot investments but today (video ads) is becoming a staple. That will continue to be our primary driver of growth,” he said.
While the Singapore based firm did not share its top line for 2016, sources close to the firm ET, said that InMobi had clocked a topline that crossed $300 million in 2016 with a net profit of $8-10 million in the last quarter alone. A 15% contribution by video ads would mean that the category contributed at least $45 million to the company’s topline in 2016.
As reported by ET, InMobi will close off 2017 with annual revenues of $425-475 million and is on course to record an annual profit of $40 million citing people familiar with the company’s developments.
“Currently, we expect mobile video to contribute to around 30% of our 2017 year-end revenues,” Pattabhiraman told ET. As per ET’s calculations, a 30% share in 2017 revenues from video ads would mean a rise from the $45 million last year to around $127-142 million in 2017 with total revenues pegged between $425-475 million. While InMobi did not confirm the targets for 2017, a spokesperson said, “Our revenue growth for 2017 is on track.”
“We started investing in our video ad platform way back in 2013 when some of these products were ahead of its time,” InMobi chief executive Naveen Tewari previously told ET. “The recent maturing of markets, like India, Indonesia and China has shot up the revenue we generate from our video ad network.”