Mobile video ads outperform online significantly: study

A study by Rhythm NewMedia confirms that mobile video advertising is performing significantly better than online.

The key finding that supports Rhythm?s claim is that the mobile video retention rate is superior to online. In fact, Rhythm found that the viewer retention rate after 60 seconds was 81 percent on its mobile ad network, versus 55 percent online. 

?One thing that is clearly jumping out is that people will realize that mobile video is far closer to TV than online video,? said Ujjal Kohli, CEO of Rhythm NewMedia, Mountain View, CA. ?It is more immersive.

?You can?t do anything else if you are watching something on your phone,? he said. ?However, people multitask heavily on the computer and they go back and forth between various content and tasks.

?That mode of behavior is not available on handheld, just as it is not available on TV.?

Mobile is to TV?
Another really interesting thing about mobile video is that the ads are spread out and therefore do not annoy people.

When watching TV, there are four or five commercials per break. This could be found to be annoying by some viewers and is one of the biggest reasons why people turn to another channel, get up to grab a snack or use the bathroom.

?The overall point is that people will realize over time that mobile video is the right complement to TV,? Mr. Kohli said.

Key findings
Rhythm found that mobile video ads are now mainstream, with more than 70 Fortune 500 brands running campaigns on its network in the fourth quarter of 2010. A whopping 200 Fortune 500 brands ran video ads on its network in 2010.

Another interesting claim that Rhythm made is that applications dominate the mobile Web when it comes to premium video.

Video views per unique user are more than five times higher in apps than on the mobile Web.

Mobile video ad completion rates exceed online and TV, per Rhythm. Completion rates for interactive pre-roll video ads remain high at 88 percent.

IPad click-through rates are highest, the study also found. In fact, iPad CTRs for pre-roll video ads are higher than iPhone, iPod touch and Android.

Additionally, action words drive high CTRs. CTRs are 67 percent higher on display ads that include written actionable words like ?Tap to video.?

?The proliferation of smartphones and tablets drive the growth of mobile video advertising,? Mr. Kohli said. ?I think that really is the main engine.

?These devices make mobile video advertising more feasible,? he said. ?There?s the bigger size screen, they have more processing power and they have Wi-Fi.

?More than half or more of mobile video is being watched via Wi-Fi so there are no worries about mobile networks being congested and all that. These smartphones and tables are the primary drivers of mobile advertising.?

New trends  
One new trend in mobile video is that consumers are now watching TV-quality content and seeing ads in between, as opposed to banners around the video, for example. 

Brands are using mobile video much like they have been using TV for years.

Mobile video started as someone snacking on short bits of content, but that is changing now.

Consumers are willing and able to watch full-length episodes now from their mobile devices, making the experience for mobile advertising much like what they are already used to on TV.

Another trend that Mr. Kohli is seeing is that consumers are consuming more mobile video content off-deck than on.

The reason for this is simple.

?When we started most video content was on-deck and now people are off-deck even more and carrier deck growth is declining,? Mr. Kohli said. ?It?s mostly because of the high subscription rates on-deck.

?Most of the content off-deck is free with ad-support, something that consumers are already trained to accept on TV and online,? he said.