Rhythm NewMedia Updates Mobile Advertising with Brand Building

December 17, 2009

MobilizedTV spoke with Ujjal Kohli, CEO of Rhythm NewMedia about the status of mobile advertising, with an update on the progress his company has made in 2009. Here’s what he had to say:

MobilizedTV: Against the backdrop of Google’s acquisition of AdMob, how would you characterize the status of mobile advertising today?

Kohli: 2009 has been a very good year for mobile advertising. The mobile web has grown a lot; all the mobile ad networks have seen that growth. Most of it is display advertising to support the sale of mobile content, games or ringtones. All of that culminated in the $750 million sale of AdMob to Google. That’s fantastic. We want to suggest that the next big wave in mobile advertising will be for building big brands as opposed to selling content. That will be based on mobile video. In this last quarter, we’ve had some exceptional progress that we’d like to share.

MobilizedTV: What evidence do you have that brand advertising will be the next big wave?

Kohli: Let’s talk about why is mobile such a good brand vehicle. For big brands–cars, banks, movies and so on–they want a medium that’s immersive, where people are relaxed and not trying to accomplish anything. TV is great for that.  Online hasn’t been so great. People aren’t immersed and are more in active mode, accomplishing tasks and multi-tasking. Mobile video recreates that lean-back immersive environment of TV.  If you’re watching mobile video, you can’t really be doing anything else. You’re taking a break, doing something you like. It’s a natural platform for brand building because people are open to brand messages.

Having said that, although TV has a huge reach, it has some serious problems that the mobile platform corrects. TV has too many ads, within a short, compressed prime-time period. Mobile is more of a 24/7 activity; it’s not prime-time-focused. The ads can be spread out. People skip ads on TV with DVR and going to get something to eat, and that doesn’t happen with mobile. People don’t take bathroom breaks. Targeting is rough on TV, but can be quite precise on mobile.  Young people are watching TV less and less. Although gross TV watching is up, if you break it down by age, late teens/early 20s is where the hit is.  Mobile addresses all those issues.

MobilizedTV: How is Rhythm NewMedia addressing this concept of brand building?

Kohli: We’ve been trying for a year to build up a network that caters to classic TV style brand building as opposed to selling things. This week, we announced a network–Rhythm Advertising Media Platform (RAMP). The content on RAMP, which is mobile video, is from over 100+ TV shows and consists of both full-length TV shows and clips from TV.com, The Food Network, Discovery Channel, E-Online, TMZ, Entertainment Tonight, The Family Guy from Fox. There is no user-generated content–not even unrecognized brands. The big brands that advertise on TV wants to put their ads against highly known properties. So it’s the same properties they buy on TV.

Our most powerful ad unit is an interactive 15-second video pre-roll that runs before the content, for both the iPhone and Android platform. While it’s playing, you can touch the screen and watch the entire trailer if you wish. So, for example, with car commercials, you can watch more videos about the car or find dealer locations.

MobilizedTV: How long have you been building RAMP?

Kohli: This last quarter–Q3 2009–we had two or three brands that advertised  on the RAMP networks, which has been operational for over six months but hasnt’ been announced yet. This quarter, 20 brands advertised, with video campaigns on RAMP. They include Best Buy, Nikon, Microsoft, Mastercard, Toyota, SpringHill Suites, Powermat, and Waterford Crystal. They’ve all been Fortune 200 kinds of brands. There’s no long tail advertising for ringtone, mobile game or e-commerce. This is all big brand building.

MobilizedTV: What kinds of deals are you striking?

Kohli: Deals very similar to TV deals. Our CPM rates are higher. The ad is so sharply targeted. We can target by demographic with age and gender. We’ve creating more female or male-oriented ads; by time of day or by content type. We can also manage frequency very tightly. On TV, people buy average frequencies of three or four, but no one can control that on TV. We are able to precisely control that  so any one person doesn’t see the ad more than a certain number of times.

MobilizedTV: Have you been able to measure the results of the campaigns?

Kohli: In terms of results, the click-through rate on our ad units have been extremely high–between 3 and 11 percent. That’s spectacular, which is why we’re geting the ad rates we are. We’ve run more than 20 campaigns this quarter. Q4 usually is a big quarter, and people take a breather in Q1, but perhaps it’s the economy coming back because our Q1 is looking bigger. We’re really jazzed: The first time our video ad network has made the radar, with content from 100+ TV shows, offering ad units no one has seen before and we have 20+ brands jump on.

MobilizedTV: Is RAMP entirely in the background or visible to the end consumer?

Kohli: The platform is strictly for serving ads. The content is available to people through apps or mobile web.So if you go on the iPhone, you can find a Family Guy app or watch Family Guy clips by going to the website. You can go to the mobile website with TMZ or download the TMZ app and get the content through that. The app makes the experience much better and faster.  RAMP is not a name that any consumer sees;  they just see Family Guy.

MobilizedTV: What has your experience been in approaching the big brands? Are they receptive or still stand-offish to the concept of mobile advertising?

Kohli: The platform is strictly for serving ads. The content is available to people through smartphone apps. So if you go on the iPhone, you can find a Family Guy app and watch Family Guy clips or download the TMZ app and get the content through that. The app makes the experience much better and faster than the mobile web.  RAMP is not a name that any consumer sees; they just see Family Guy or TMZ.

MobilizedTV: What has your experience been in approaching the big brands? Are they receptive or still stand-offish to the concept of mobile advertising?

Kohli: What we’re finding is enormous receptivity. In fact, we were getting sold out. Between 15 to 20 million people watch mobile video in America so there is only so much available inventory against with which you can add ads. We have the situation where advertiser interest is running ahead of the content.  Big brands are all looking for alternatives for advertising.

MobilizedTV: Many people believe that the business model for making money on mobile will be subscription, not ad-supported. What do you say to these people?

Kohli: For premium content–TV class content–pure advertising isn’t enough of an economic model. Ultimately, hybrid models will do the best, which is what TV is, by the way. Other than the internet, the entire media business works that way. You buy a magazine and pay $3.50 but there are still ads in it. You can get radio free, but there are Sirius. TV is, of course, a hybrid:  you pay $40/month and you also get ads. For premium content, hybrid models will prevail in the end.

MobilizedTV: What’s in the near future of mobile advertising?

Kohli: As a whole it’s doing very well…finally. Across the board, mobile advertisng is finally hitting its stride.

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