When you choose the texture format, you are choosing to prioritize either file size or in-memory size. If you want a smaller effect file size, choose uncompressed. If you want a smaller in-memory size, choose ETC.
An uncompressed effect uses either a PNG or JPG image file. Using either one of these formats reduces the image file size when exporting the effect, but both of these files expand to the full raw image on loading.
ETC textures have a fixed compression ratio. This means that the image file can be larger than the equivalent PNG or JPG, but will be smaller than the full raw image. On loading, ETC textures remain the same size, which is smaller than the equivalent PNG or JPG.