Mobile video ads generate more than four times the click-through rate of direct-response ads. That’s the conclusion of a study recently completed by MobiTV, the mobile television provider that counts more than 3 million customers for its video-on-cell-phone service.
The MobiTV study—one of the first to measure consumer responsiveness to ads in mobile video content—is slated to be released this week. Marketers are eager to understand the small but growing medium of mobile video before they pour more ad dollars into it.
Ad spending in the mobile medium should reach $1.6 billion this year and jump to $4.8 billion in 2011, according to eMarketer. Most of the ad spend this year is going to text-message marketing as well as advertising on WAP sites, which are Web sites tailored for the mobile phone.
But mobile carriers and content providers are eager to grow the video side of the mobile ad business, and studies like the one from MobiTV should help. The study found that MobiTV viewers clicked on ads in mobile video content at a rate that’s 300% greater than the direct-response industry’s. The standard for that segment of the ad business is about 1%, meaning MobiTV viewers interacted with ads about 4% to 5% of the time.
That includes ads on networks such as Fox Sports and in front of music videos from Universal Music Group, said Jack Hallahan, MobiTV’s VP of advertising and brand partnership. MobiTV viewers can jump from 30-second spots to more interactive experiences, such as click-to-dial options, links to WAP sites and additional branded content from the advertiser.
Advertisers on MobiTV have included Toyota, Paramount Pictures, Charles Schwab and the U.S. Air Force.
Mobile video ads are still a novelty to some degree, so interaction may settle down a bit, Mr. Hallahan said. However, because the cell phone is inherently an interactive device, he does expect the click-through rate to remain high. “The phone in and of itself is like carrying a remote, but you can watch it, too; you use your phone to text, for e-mail, to make phone calls. When you look at the second screen, it’s interactive,” he said.
Mr. Hallahan said MobiTV sells ads on a sponsorship basis and prices the interactive spots at a premium. Most ad buys range from $50,000 to $100,000 for a four-week buy. The MobiTV service skews young and male; the study found 67% of MobiTV users are men and 82% of its customers are between the ages of 18 and 39.
Some of MobiTV’s early ad partners are boosting their ad spend this year. Paramount plans to double its mobile video ad budget in 2008, including buys on MobiTV, said Brian Aucoin, partner and group director with Mediaege:cia, the media buying agency for the studio.
“Last year it was more experimentation,” he said. “Now it’s gotten bigger and more accepted, and we just feel these are key consumers for us. The person who accesses video on mobile devices is seeking out entertainment and is a high-income person and an evangelist, and this is a person we want to reach with our message.”
Look for mobile video ads for the Paramount movies “Iron Man” and “Indiana Jones and the Kingdom of the Crystal Skull” later this year. Most of the movie ads let viewers click through to see a longer trailer or clips.
Paramount also will advertise this year with MyWaves, sort of a YouTube for mobile phones. MyWaves is a mobile video destination that is accessible on most phones with mobile video capability. It’s a free service that attracts more than 5 million unique visitors per month to a mix of user-generated and premium content from networks including CBS, Fox, CNN and MTV. Most users tune in to watch MyWaves videos weekly, with average viewing times of 24 minutes per session, the company said.
This week MyWaves plans to announce a partnership to feature video content related to Sports Illustrated’s swimsuit issue on a dedicated MyWaves mobile channel. The channel will offer more than 50 video clips, including video from photo shoots and interviews with models.
MyWaves has tested various ad formats in the last year, such as banner ads and WAP sites. The ads that are most contextually relevant to the content generate the highest click-through rates, said Susan Cashen, VP of marketing.
In the second quarter, MyWaves plans to run an ad campaign with a video game maker that will include a click-to-buy option for the game.
In the spring or summer, MobiTV will offer locally targeted ads so consumers can find the nearest car dealer, quick-serve restaurant or store, for instance, when clicking on ads in those categories, Mr. Hallahan said.
MobiTV’s study also revealed the following consumer usage data about mobile video:
• 43% of parents who subscribe to MobiTV have used it to entertain kids in the car.
• 67% of subscribers have shown the MobiTV service at a party or other social gathering.
• 85% of MobiTV subscribers say they watch more TV at home since they have MobiTV
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