• by Mark Walsh  @markfwal, September 24, 2014

Mobile video advertising is expected to rise sharply this year from a small base. Ad revenue in the category is expected to more than double to $1.44 billion this year, making it the fastest-growing area of advertising, according to an eMarketer estimate in July.

Among the platforms responding to that demand is mobile rewards network Kiip, which has added video advertising as an option for marketers beyond image-based ads.

Kiip’s in-app ad service offers users rewards like virtual currency or a coupon or gift card by interacting with an ad presented at “achievement moments,” like when someone levels up in a game, completes a to-do list, or logs a workout in a fitness app. With the launch of Rewarded Video, users will now have the opportunity to watch a 15- or 30-second brand video to win items such as virtual coins for in-game use.

Among the initial brands that have tested video ads on Kiip to date are broadcasters or studios, such as AMC (promoting “The Walking Dead”), McDonald’s, Trident and Trolli. In early results, the company reports average view-through rates of 77%. One of the attractions of video advertising on any screen is the promise of driving higher rates and revenue.

Kiip indicated that developers in its network have seen video effective CPMs of up to about $30 compared to $15 to $20 for static ads. “The move to add Rewarded Video to our product offering is in response to both brand and developer demand. We took the feedback and translated it into an experience true to Kiip,” said Michael Sprague, head of marketing and partnerships at Kiip.

Some brands, of course, will never want to work with an offers-based network like Kiip to avoid the impression that they are, in effect, bribing users to try their service or product. But for Kiip and other mobile ad companies, the addition of video placements provides a new lure for advertisers, especially those in the entertainment area. At the same time, the format makes attention to the user experience all the more important.

In that regard, the Kiip video ads don’t autoplay, but require a user to click on them first and offer the option of closing the ad altogether by pressing an “X” button in the upper left corner. It's also incumbent on Kiip to ensure that video spots run smoothly or viewers will quickly become annoyed and discouraged from clicking one of the ads again. 

Whether many brands find the premium for video ads on Kiip worthwhile will take more time to see, but the move is indicative of the expansion of video advertising across the mobile landscape.