• by Mark Walsh  @markfwal, October 18, 2010

Android devices may be surging past the iPhone lately in sales, but when it comes to click-through rates on video ads, Apple devices still lead the Google platform, according to new data from mobile video ad network Rhythm NewMedia.

Leading the way was the iPad, with interactive pre-roll ads generating a click-through rate approaching 2.5% on the Apple tablet compared to about 1.5% for the iPod touch, 1% for the iPhone, and .75% for Android phones, based on usage across Rhythm's network in the third quarter.

That finding appears to support recent research from Nielsen showing that iPad owners are more receptive to ads than people using other gadgets, including the iPhone. Rhythm CEO Ujjal Kohli suggested that the form factor of the iPad has much to do with its higher ad-interaction rate. "It seems common sense that when you have an amazing quality screen of that size, you'll see great click-through rates," he said.

Among other findings, Rhythm's quarterly report indicated that display ads including watching a video as a call to action had a 79% higher click-through rate (of 10.3%) than those without video. In terms of formats, full-page ads had the highest average CTRs at 5.8%, followed closely by ads that run while an app is launching (either display or video), 5.4%, pre-roll, 1%, and banner ads, 0.5%.

Kohli attributed the higher rate on full-screen and app launch ads in part to avoiding an overly intrusive approach. For instance, if someone is viewing a mobile photo gallery, full-screen ads are interspersed with pictures, similar to how full-page ads are presented in magazines. "People in digital don't think fully enough about the consumer experience," he said.

Entertainment and consumer-packaged goods were the top advertising categories, accounting for close to half of third-quarter campaigns. Those segments were trailed by services, telecom, travel, auto, retail and "other." The ad data in the study was based on campaigns from more than 100 Fortune 500 brands.

Rhythm also said mobile video had a higher retention rate than online video, compared to figures recently reported by Visible Measures. While almost 20% of online viewers abandon a video within the first 10 seconds and 44% after a minute, only 6% and 32%, respectively, did so with mobile video. Separately, the completion rate for pre-roll ads on the Rhythm network was 87.4%.

Viewing time for full TV episodes within apps increased by 20% in the third quarter to an average of about 37 minutes per month. Rhythm's network features premium content from about 100 publishers including the Discovery Channel, TMZ, CBS News, AMC and the Food Network. Mobile viewing remains spread throughout the day, although there is a modest uptick roughly equivalent with TV prime-time hours.

Average monthly content views on Rhythm had another quarterly gain of 30% to 425 million. So how can a mobile video network like Rhythm continue to grow at a healthy clip while a mobile video service like Qualcomm's FLO TV is being shut down?

Among other reasons, Kohli pointed out that subscriber-based mobile video offerings like FLO TV are giving way to ad-based ones. "As a result, media companies are bringing that content onto ad-supported models in mobile and that's accelerating, and that's why premium content is the fastest-growing category," he said.

At the same time, Kohli acknowledged that the relative novelty of mobile video and advertising could be a factor in driving higher engagement. "I'm sure novelty does play a role," he said. "In the online world, we started with stratospheric click-through rates only to see them settle down." To avoid the fate of online banners, he emphasized that mobile publishers and advertisers should eschew ad clutter in favor of fewer but higher-quality placements.