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Fresh off PacketVideo‘s $45 million strategic investment from Japanese mobile giant NTT DOCOMO, I had the chance to talk with Chief Business Officer Joel Espelien. The investment brings the company closer to the existing partner, which should help it position itself better for delivering its flagship mobile video platform.

PacketVideo works with most major worldwide carriers and is the de facto video platform within Google’s Open Handset Alliance. The company, in fact, doesn’t get as much airtime as it deserves given its installed base and longevity. I was surprised to learn it’s been delivering mobile video since 1998.

With the expected growth of mobile video, the company is positioned well. This growth will come from an acceleration of smartphone penetration, the general rise in mobile hardware standards and carrier-subsidized hardware pricing. Simply put, bigger and better screens are being put in more users’ hands.

Cisco Systems meanwhile reports that mobile video will drive the lion’s share of data consumption on the mobile device over the next four years (an exabyte by 2012). This stands to reason, based on file sizes, but we’ll also see growth in volume consumption.

But many other market factors in the mobile industry are forming the company’s direction. The growth of the mobile app is causing PacketVideo to deliver video through apps for carriers. The location awareness and portability of the phone are also important factors, as we keep saying, that will determine the best content (and ad) delivery and formats.

Espelien agrees that the early adopters of mobile advertising are simply porting over online strategies to a smaller screen. This generally involves banner ads that aren’t utilizing the targeting capabilities of the device (read: location). In some cases, with video, it also involves pre-roll ads, which haven’t been effective thus far.

Video brands and advertisers are also thinking in terms of television-based ad targeting, such as contextual relevance, day parting, and relatively blunt audience segmentation. Mobile video should bring in more precise location and behavioral targeting. It will take a while for the models to come together and for Madison Avenue to get on board, but these factors will come into the picture — especially location.

“We’re trying to make sure our innovations around mobile application development that carriers can be successful with are going to tie back into some of these threads,” says Espelien.

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