MultiChannel News: Microsoft’s Xbox 360 was the top non-PC platform for viewing professional digital video content and ads in the first quarter of 2012 — beating out iPad, iPhone and Android devices — although such gadgets represent only 4% of total online and mobile views, according to ad-management firm FreeWheel.

Xbox captured 28.2% of all non-PC/Mac video viewing in Q1 2012, versus the iPad at 27.1%, FreeWheel found.

Given that the Xbox has higher penetration (26% of all U.S. households, according to Nielsen) than iPads (15%) — and combined with the recent content deals Microsoft has struck with Comcast, HBO, Epix, YouTube and others — “it is likely that Xbox viewing volume will continue to increase,” FreeWheel said in its Video Monetization Report – Q1 2012.

Microsoft last month expanded its advertising program for the Xbox 360, which lets content owners place 15- and 30-second spots in video content on the Xbox Live subscription service, adding ESPN and CBS Interactive’s GameSpot and Last.fm to the network. The new ad features were enabled via an Xbox 360 upgrade in December. The Xbox Live subscription service counts nearly 40 million active members worldwide.

Still, non-PC/Mac viewing now comprises about 4% of all professional digital videos viewed, up from 1% in Q1 2011, according to FreeWheel. Moreover, monetization rates are lower on Xbox, iPad and other devices: Content viewed on PCs had nearly one video ad for each video view across all content lengths, whereas Xbox and iPad are well behind that at 0.31 and 0.40 video ads per video view, respectively.

“Video viewing volume on the Xbox and iPad may be on the rise, but the optimal monetization of these alternative devices still has room to grow,” FreeWheel said.

Meanwhile, overall video ad loads in the first quarter showed no seasonal dip from Q4 2011, which FreeWheel said has historically occurred because of lower volumes of retail advertising and fewer product introductions in market at the beginning of the calendar year.

Another key trend in the first three months of 2012 was that mid-roll ads grew at a much faster clip than pre-roll ads, increasing in Q1 by 115% vs. 45% year-over-year, respectively, FreeWheel said. That indicates that additional long-form content is coming online overall and that publishers are making more mid-roll inventory available, according to the firm.

“The pre-roll was once considered the de-facto standard for digital video, but the increase in advertiser usage of mid-rolls is showing the high value of ads that live within pods between segments of professional content,” FreeWheel said in the report. Mid-rolls now comprise 23% of all video ad views, up four percentage points from Q4 2011.

The data in the report is based on ads FreeWheel served on behalf of its clients. The firm served over 8.7 billion video ads in Q1 2012 and made ad decisions for over 11.6 billion video views. The report is available to download here.

Written by Pace Lattin

Pace Lattin is one of the top experts in interactive advertising, affiliate marketing. Pace Lattin is known for his dedication to ethics in marketing, and focus on compliance and fraud in the industry, and has written numerous articles for publications from MediaPost, ClickZ, ADOTAS and his own blogs.

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