• by Mark Walsh  @markfwal, November 6, 2012

New data from Rhythm NewMedia shows an increasingly intertwined relationship between rich media and video in mobile advertising. The mobile video ad network says that trend is driven mainly by growing demand for video advertising on devices.

Because rich media providers don’t necessarily offer in-stream video or pre-roll ads for mobile, they’re more frequently adding video to rich media ads to meet that demand.

Rich media itself has become more widespread on the Rhythm network -- used in 43% of campaigns in the second and third quarter, compared to just 12% in the year-earlier period.

More than a third (36%) of rich media full-page ads used video, and 28% of campaigns used in-banner video in Q2 and Q3. Interaction rates for custom buttons in that ad format -- for getting more information or viewing photos or video, for example -- ranged from 2.2% to 10.8%.

For rich full-page ads, Rhythm says adding a mini video player boosts interaction rates for the units by 30%, to 3.8% to 12%.

Underscoring the Rhythm findings, mobile ad network Millennial Media indicated in its third-quarter earnings call Monday it’s also seeing an increase in rich media and video advertising. Millennial CEO Paul Palmieri said that growth is driven in part by the expansion of 4G wireless service, making it easier for users to watch mobile video in particular.

Millennial CFO Michael Avon added that he expects spending on mobile rich media and video ads to pick up even more in the current quarter as entertainment and retail marketers pull out the stops to grab consumers’ attention during the key holiday shopping season.

Earlier this year, eMarketer projected spending on mobile rich media and banner advertising would increase to a third of total U.S. mobile ad dollars, or $861.7 million. Video will account for 5.8%, or $151 million, of the overall $2.6 billion total predicted, up from 4.7% last year.

The Rhythm data comes from ads served in the U.S. across iPhone, iPod Touch, iPad, Android and other devices in the second and third quarters. Its network spans more than 200 apps and sites owned by publishers such as NBC Universal, ABC, IAC, and Warner Bros. Brand advertisers on the platform include McDonald’s, Disney, Paramount, General Motors and Ford.