What are benefits that hexadecimal provides? And is it really octal is less common than hexadecimal?
Well, I mean, the computer itself doesn't store any values in hexadecimal, it stores them as binary. However, we do choose to represent them as hexadecimal digits, for one main reason  it's the easiest, most concise way to represent bytewise data:
0110 1011 becomes 6B in hex
Octal would require grouping of digits into 3, which would not allow for separation at byte level:
01 101 011 becomes 153 in octal
Note that the most significant digit will never be greater than 3.
From wikipedia:
All modern computing platforms, however, use 16, 32, or 64bit words, further divided into eightbit bytes. On such systems three octal digits per byte would be required, with the most significant octal digit representing two binary digits (plus one bit of the next significant byte, if any). Octal representation of a 16bit word requires 6 digits, but the most significant octal digit represents (quite inelegantly) only one bit (0 or 1). This representation offers no way to easily read the most significant byte, because it's smeared over four octal digits. Therefore, hexadecimal is more commonly used in programming languages today, since two hexadecimal digits exactly specify one byte.
As said before, everything is stored in binary. Think; the IPv4adress 192.168.0.1 in binary it would be 11000000.10100000.00000000.00000001. Imagine an IPv6address written in binary. It would be unpractical.

As an aside, the dotteddecimal IP address
192.168.0.1
is the unsigned int3232235521
which how it's actually stored (which translates into the binary you've posted, but without the dots). Jan 20 '15 at 4:09