In this week’s roundup, we look at a new study that signifies big things to come in the mobile ad space, a report from McKinsey & Company about measuring word of mouth, comScore data showcasing our insatiable appetite for online video and more. Find your full recap below — and, as always, let us know your thoughts in the comments below or by sending us a tweet.

MMA: Location-Based Ads See 50 Percent Engagement Rates

According to a new study from the Mobile Marketing Association, one in four U.S. adults use mobile location-based services. Of that group, about 50 percent respond to geo-targeted ads based on GPS data.

WHERE launched a hyper-local ad network last year that serves advertising that is both geo and contextually targeted. The company claims that engagement rates for the location-based ads are 3X higher than standard mobile ads.

ReadWriteWeb points out that a traditional web banner ad with a 2% CTR is considered successful – however, most campaigns receive CTRs between 0.2% and 0.3%. Though the comparison is not entirely apples-to-apples – mobile ad engagement is not always measured through the click – the sky-high response rate to these types of mobile ads is, potentially, huge.

Other findings:

• iPhone owners use location-based services at a much higher rate than cell phone users (63 percent vs. 10 percent)
• Adults ages 25-34 are the most frequent users of location services – nearly one quarter of this group use them once per week or more
• Consumers are interested in allowing their phone to automatically share their location in exchange for perks, such as free use of mobile applications and mobile coupons

As mobile adoption rates continue to soar, forward-thinking brands will continue to see unprecedented opportunities to reach consumers in new and exciting ways. For more insights and ideas, check out our recent post on mobile and the future of couponing.

McKinsey Report Proposes New Way to Measure WOM

A new article by McKinsey & Company highlights the growing momentum of word of mouth marketing and introduces a new metric to measure the impact of WOM. The report defines “word-of-mouth equity” as the index of a brand’s power to generate messages that ultimately influence consumer purchase intent.

Image via McKinsey & Company

States the article: “By looking at the impact – as well as the volume – of these messages, this metric lets a marketer accurately test their effect on sales and market share for brands, individual campaigns, and companies as a whole.” This impact reflects the ability of a WOM recommendation (or dissuasion) to alter consumer behavior and takes into account who said it, where it was said and the product category conversations fall within.

You can read the full article on the McKinsey Quarterly website (free registration required). And for more great WOM insights, register for WOMMA’s upcoming School of WOM conference, which will feature case studies from some of the world’s largest brands.

360i Report on Nielsen and Facebook’s Advertising Effectiveness Study

This week we released a POV on Nielsen and Facebook’s recent study outlining the positive relationship between paid and earned media on brand awareness and engagement metrics. The study is the first joint research report from the two companies following their September 2009 announcement that they were partnering to develop quantifiable brand-focused measurement for advertisers on Facebook.

View and download the full report.

ComScore: Online Video Viewership Jumps 3.5% Month-over-Month

A new comScore study found that 180 million Americans watched online video during March – representing a more than 3 percent jump from February. Most online video views occurred on YouTube, though the leading video site’s total share dropped slightly month-over-month.

Search Engine Land reports that just seven months ago YouTube became the first site to serve more than 10 billion videos in a month. In March, this number jumped to more than 13 billion. Additionally, YouTube visitors watched nearly 100 videos each during March. Hulu users viewed 27 on averaged.

360i recently met with Kyte CEO Daniel Graf to discuss what the digital media platform has to offer for marketers. Kyte hosts several production and distribution tools – both online and through mobile channels – for a broad spectrum of media content. Like Franz Ferdinand, hundreds of artists – including Lady Gaga, Lenny Kravitz and 50 Cent – use Kyte to promote their music online and via mobile technology. Graf told 360i that one 50 Cent video (via www.thisis50.com) had garnered almost 50,000 views in an hour. Another recent show by the popular rap artist boasted 200,000 views.

To see how this works, watch Ashley of the Pussycat Dolls on the Kyte player below as she talks about her recent appearance on Late Night with Jimmy Fallon:

It’s not just about the music, either. TV and film brands are also flocking to Kyte’s unique service offerings. Kyte’s player interface fuels audience interaction by creating multiple opportunities to weigh in on site content. For instance, viewers can rate multimedia or chat with other users about what they are watching – wherever they are watching it. Through Kyte, assets can be shared on a publisher’s site, Facebook and other social networks. The result? A high level of participation that facilitates real-time conversation among users.

An Ad Manager handles sponsorships and house ads, and the platform integrates with all major ad servers and networks. This February, Kyte launched its branded iPhone app service, which allows marketers to create custom apps through the Kyte framework. Visit Kyte’s blog to learn more about how the multimedia platform works.

Kyte’s simple monetization model, opportunities for custom sponsorship and overall portability make the platform very useful for entertainment and consumer packaged goods brands looking to promote multimedia content across a broad range of Web sites and social networks. We also recognize the high value of Kyte’s prominent social components, which favor lively conversations about content over the mere one-sided broadcast of a brand’s assets.

One of the primary impediments to greater advertiser adoption of online video has been a lack of premium content. Advertisers are often wary of inserting themselves into user-generated content (UGC). However, more premium content has been finding its way on line thanks to sites like Hulu and notable online projects like Dr. Horrible’s Sing-Along Blog from writer/director Joss Whedon.

Now YouTube – the mother of UGC – is in the premium content game. This week, YouTube announced they are making a full commitment to long-form video in the form of shows and movies. As of today, visitors to YouTube will see a new tab called Shows. This tab appears at the top of the site, in the primary navigation, and YouTube will be also be promoting and driving traffic to this area via buttons on other pages throughout the site. Shows will come from a variety of partners including Sony, CBS and others. The shows will not be first run programs. Rather, they represent classic and recent (but not current) programs.

Ad Opportunities
The ad units that will appear in and around this video content are similar to the standard video ad units currently available on most major video sites. YouTube currently offers 15- and 30-second spots and they expect to add 60-second spots in the near future, which is important for advertisers in industries such as pharmaceuticals where there is disclaimer information that needs to be communicated. YouTube plans to offer more traditional video ad units for shows — pre/mid/post roll units.

To maintain user friendliness, there will be a limited number of commercial breaks, with 7 minutes of programming before a commercial break. While there could be more than 1 ad or advertiser per program, there will only be 1 ad per pod.

Similar to other video ad networks, marketers cannot cherry-pick shows they want to run on, although they can opt out of specific shows. Most ad buys negotiated through YouTube will be available by genre or demographic interest — male, female, teens, family friendly — and sold on a CPM basis. However, advertisers can buy spots on specific shows by going directly to the network that created the programming.

YouTube has in its court an enormous user base that is already loyal and established. As YouTube increases its database of premium programming, it could become the platform for video viewing that is most accepted by viewers — and that means lots of eyeballs in one place for advertisers to buy.

- Laura Mete Frizzell, VP of Media Services, 360i

Nintendo did some crowing about 2008 software sales in its monthly report, as well — 20 of the top 30 games of January were made for Nintendo systems. Of those, five games made for Nintendo systems finished in the top 10 best-sellers of January. This report occasions a significant clarification to my previous column — the 3% growth in software sales I cited last month was specific to the Japanese market — which is probably the most mature market for that console. As can be seen from last month’s NPD numbers, software sales in non-Japanese markets are still very healthy. The question remains, however, whether or not those numbers will continue to stay strong as the markets for Wii software in the U.S. and Europe mature.

Both Xbox and Nintendo continue to see strong results thanks to their innovations — Nintendo by exploring new, casual markets for console games, and Microsoft with a strong title library and innovative console features, like the Netflix streaming video service — making them the choice platforms for reaching gamers in the new year.

Image via CrunchBase

Let’s agree right away that YouTube’s Sponsored Video isn’t the next Google Killer.

It’s not even the next Yahoo killer, even though comScore recently reported that YouTube is now the second largest search engine. Fittingly, around the time that the comScore news broke, Google publicly launched search-triggered Sponsored Video ads on YouTube. Does this mean marketers need to consider YouTube over Yahoo and Microsoft?

It’s not going to quite work out that way. First, it’s helpful to understand how YouTube search ads work:

• You need to promote a video that’s on YouTube. This is designed to drive video views, not site traffic.
• You must have uploaded the video through your YouTube account. For my trial, I used this video I titled “Soufflecam,” a grainy, shaky shot of a waiter serving chocolate soufflé while at a dinner with New York Times columnist David Pogue.
• You can target videos for words and phrases, and they’re supposed to be relevant to the video, though I’ve found many ads running on completely irrelevant terms. Presumably Google is focusing on driving up inventory for now rather than fine-tuning relevance. For my video, I used phrases like “chocolate soufflé” — surely a top query.
• Ads run on a cost-per-click basis.This is all very different from search advertising. With a typical search engine marketing campaign, not only are direct response metrics critical, but you get penalized for branding messaging. With sponsored videos, you have some flexibility to include branding, and you’re promoting content.

Taking a step back, the consumer mindset is very different on Google and YouTube. On Google, a consumer might be looking to buy a new car. On YouTube, a consumer might be looking for a cool car commercial. Viewing that commercial might improve various branding metrics, but there will be a large percentage of people who just want to watch the commercial that everyone’s talking about.Google and YouTube also differ in terms of the marketers they attract. Google AdWords opened up to everyone. It got to the point where marketers stopped asking if they should advertise on Google and instead asked how much they could spend there while still reaping a return on ad spending. Google’s not the most important platform for every marketer, but every marketer needs to consider it, and just about everyone can get at least some value out of it.

YouTube Sponsored Video is something else entirely. Yes, more marketers are uploading videos to YouTube, but how many of those videos will benefit from paid promotion? Some marketers can quantify it. Movie studios want to get people to watch their trailers, and they understand the value of it. Bands can use music videos to try to fill up a venue. Marketers can also pay to promote their responses to major issues and crises, such as when JetBlue founder and then CEO David Neeleman published a video apology for a string of lengthy delays. At the time, that segment might have benefited from Sponsored Video. Today, that apology comes up first when I searched for “JetBlue” on YouTube, so JetBlue might want to run an ad to direct searchers to something a little more upbeat.While more marketers will find ways to use Sponsored Video, it won’t be for everyone. Not everyone’s in the brand-building business online, and not everyone who is will have video assets that are good enough to merit promotion on YouTube. Marketers who try to promote subpar content may find themselves with negative reviews and ratings, so it’s important to be selective.On the flipside, video ratings are included in the Sponsored Video ad, so great videos will attract even more viewers with their four- and five-star ratings. I searched for James Bond on YouTube the Monday after the latest movie premiere and an ad from Activision appeared promoting a trailer for the video game based on the movie. The game trailer is rated five stars, and clicking the video shows it received 19 ratings, so YouTube’s community validates Activision several times throughout the experience. That’s unique to YouTube, and the advertiser benefits even without a click (in some ways, the advertiser benefits more without clicks since impressions are free).

The first step, as Activision learned, is uploading good content. There’s no official Quality Score, but don’t get lulled into a false sense of complacency. While Google won’t judge you here, your potential customers will.