Wi-Fi rules as the primary way that consumers watch video content, likely resulting in more long-form streaming, according to a new report from Rhythm NewMedia.

Video watched via Wi-Fi grew 37 percent year-over-year, showing that there is a growing need from consumers to watch more video on their smartphones and tablets. In Rhythm NewMedia's report from the second quarter of 2012, the company looked at which mobile ad formats and content are most effective at grabbing users' attentions.

"Three things jump out at me from this report. First, the fact that more than half of tablets are shared between two or more users means that the tablet audience is even larger than previously predicted," said Ujjal Kohli, CEO of Rhythm NewMedia, Mountain View, CA.

"Second, that 82 percent of users would rather download a free ad-supported app than pay for an ad-free version means there is and will continue to be a plethora of marketing opportunities in mobile," he said. "And third, I find it extremely relevant that 92 percent of Rhythm ad campaigns included in-stream video."

"Mobile advertising has outgrown the simple banner in favor of rich and engaging digital media. Digital ad content is just better at helping advertisers catch the right fish."

Rhythmn NewMedia sells and serves mobile video and rich media advertising to premium media companies. The company claims to have more than 50 partnerships with premium media brands and works with brands including McDonald's, Unilever and Marriott.

Mobile engagement
When it comes to what types of video content are most impactful, the report found that users were 80 percent more likely to notice in-stream ads. In-stream mobile video ads appear as either a pre-roll or as a commercial break during a piece of video content.

In particular, entertainment news keeps users coming back on a regular basis. Per Rhythm NewMedia's findings, approximately 45 to 60 percent of consumers who visit a news entertainment destination visited the destination the day before.

Eighty-two percent of consumers in the study preferred to download a free, ad-supported app versus a paid one, indicating that consumers are willing to interact with mobile advertising in exchange for free content.

Rhythm New Media also claims that its ad units average an 89 percent completion rate compared to 68 percent completion rates from online videos. This marks a 31 percent increase for mobile video ads.

Tablet habits
When tablet owners were asked how many people in the family use the devices, 44 percent of respondents said that only one person used each tablet. To compare, 32 percent of consumers said two people used the tablet and 17 percent said three people.

Consumers are also watching video on a routine basis. Fifty-eight percent of users watched videos and shows more than once a week. Eight percent of consumers said once a week, and 22 percent of users said less than once a month.

Ninety percent of campaigns running with Rhythm New Media included display ads, and 72 percent used full-page ads.

Tacking on custom buttons for extra engagement ? such as a button to "Like" a brand on Facebook ? were used by 58 percent of Rhythm New Media interactive in-stream campaigns. Mobile advertising is consistently used as an action-driver medium, meaning that giving users a way to directly connect will likely yield strong results.

As the gap between television and mobile viewing continues to narrow, Mr. Kohli predicts that consumers will rely on tablets to watch longer-form content.

"I think that over time video usage on smartphones will continue to be flat throughout the day, with people snacking on video anytime they feel like it," Mr. Kohli said.

"Tablets, on the other hand, are going to start to show the same prime-time concentration seen in online video," he said. "Tablet video viewing will become something people do at home when they have more time to watch longer content as opposed to something they pick up quickly during work hours for a quick clip."

Final Take
Lauren Johnson is associate reporter on Mobile Marketer, New York