Rhythm New Media: Mobile is the successor to TV
MobilizedTV had the chance to speak with CEO Ujjal Kohli about the findings of the report and why he believes that mobile–not online–is the natural successor to TV.
MobilizedTV: On your website you say you are the largest mobile video ad network. How do you quantify that?
Ujjal Kohli: It’s based on the size of the inventory we have for mobile TV, and we release all our numbers. In Q3 of 2010, we served over 425 million average monthly content views. Our network grew 30 percent in Q3 as well.
MTV: How do you define mobile video ads?
UK: Mobile video can be many different things. We believe the most valuable form for advertising is what most resembles TV. That means someone has decided they want to watch premium content and your video ad will play as a pre-roll or in the midst of it. The fastest growing segment is, in fact, premium video. As the operator services like V CAST fall away, premium video is ramping up.
Nielsen’s Three Screen Report said that, in certain demographic groups, people are watching more video on their smartphone than online. That is a startling statistic.
The growth of watching premium video on smartphones and iPad is exploding. That’s how we define our space.
MTV: What’s your methodology for the statistics you present in your report?
UK: These are simply Rhythm’s numbers for the system. It isn’t a survey; it’s hard data. We try to present the data that people in the industry will find insightful but not give away our competitive challenge.
MTV: What are some of the hot button issues?
UK: There is a lot of talk about how TV is broken, but if you look at the numbers and spending, TV numbers are up. TV is strong as ever. The question is, is there any successor to TV? Can branding be done anywhere aside from TV? In our self-interest and beause we believe it, we believe mobile–not online–is the rightful successor to TV.
MTV: How do you come to that conclusion?
UK: Two reasons. Any brand knows the most powerful thing about TV is its reach and the immersion. When people watch TV, they are emotionally open to brand messaging. On the computer, the trouble is that people multitask, they have multiple screens open, and so they’re not absorbed. It’s hard to do branding. In fact, TV has a problem too in that regard.
But if you’re watching mobile video on your handheld, chances are your not doing anything else.
Secondly, if you look at usage pattern of mobile video, it’s steady throughout the day. Usage for TV has a spike at primetime, as does the Internet. This mobile video usage is 24/7. That is why brand is so precious on mobile.
MTV: So the notion of primetime is irrelevant on mobile?
UK: In the 1960s, P&G advertised to homemakers on two TV shows they owned. Then women started to work more and more and [the importance] of daytime dissipated. Nothing has replaced that since. P&G and a number of brands all have to shout in that same primetime and there are so many ads. The spreading of usage throughout the day is priceless, for reaching men and women. People watch throughout the day and see one ad at a time, and the message sticks more than seeing one ad out of dozens during a 30 minute show.
Mobile is the real successor to TV for other reasons. The retention rate is 94 percent in the first 10 seconds versus 81 percent online. And the completion rate of ads is 87 percent. I have tried to find numbers for the completion of online ads and on TV. I think the real rates online are probably not even half of that. On TV, they’re probably not even 20 percent. By that I mean that if I guarantee that you watch that show, what are the odds you saw such and such an ad? How many commercials do you actually watch? This completion rate results because we’re not inundating people. If people take 3 minutes to watch E! on mobile, they only see one ad.
MTV: But won’t the growing popularity of mobile video mean that people will again be inundated by ads?
UK: As mobile gets more popular, if we go to the same ratio–in other words, if we show 8 or 9 minutes of ads in a 30 minute program–the same problem will emerge. But we have a long way to go to get to that problem. TV is a $70 billion ecosystem, and mobile might break $1 billion for all of its advertising. It’s the fastest growing but it’s small right now. That’s because the rest of mobile advertising is all Internet-oriented banners, click-and-buy which is a very different kind of money. In other words, [with mobile video ads], $70 to 80 billion is sitting untouched. That’s what we’re after, not the banners or the click-and-buy.
MTV: What are some of the report’s other impressive or surprising statistics?
UK: The iPad leads the CTR for interactive pre-roll video ads, over iPod touch, iPhone and Android. We also have some interesting numbers on the click-through rate by ad unit; how the call-to-action boosts CTRs and the most successful categories in mobile video advertising. We also found that full episode viewing is up again, this time by 20 percent and that a significant amount of mobile viewing is done at home. Mobile video watched on iPad, for example, is 90 percent via WiFi.