With the rapid evolution of digital technology, the advertising space seems to be drastically changing. It’s clear in the future that AVOD (Advertising Video on Demand) will be an alternative that’s on the increase. AVOD does give advertisers another means of reaching an audience because it melds advertising with video content. This paper gives a thorough overview of AVOD’s merits and risks for advertisers and how this model changes the landscape of digital advertising across several fronts, with a focus on CTV and OTT advertising.
Defining AVOD
This type of content-based advertising is known as AVOD, where users do not have to pay for the content and are instead shown multiple ads. In contrast to the subscription models that are common with SVOD, the AVOD model allows viewers free access to content without having to sign up through an expensive paywall. This AVOD model does allow advertisers to connect to audiences engaged in active video watching on behalf of the advertisers.
The exodus from traditional cable TV to streaming services has made AVOD a hot topic. With the rapid growth of OTT and connected TVs, advertisers can take a hold of these platforms and offer their ad services, however this sheds light on new issues that come along with this advertising approach. AVOD does have its cons but it’s profits and audience reach can be stunning.
The Appealing Nature of AVOD to Advertisers
Large Consumer Base
Due to a plethora of consumers being attracted to AVOD, advertisers are able to target specific demographics. This is a prime opportunity as many AVOD services are completely free of charge and have a diverse viewer range, allowing millennials and even the older generations who are avaiable on these platforms to be reached. This makes advertising much more effective, especially long with catering these their target audience.
Greater penetration: The shift from traditional TV to connected LCDs contributes to the increasing popularity of AVOD. Hence, traditional marketers have a great opportunity to reach their sought-after After Audience.
Global outreach: Emerging AVOD services are available around the globe, allowing advertisers to promote their services without the need to focus on specific geographies.
Cost-Effective Marketing Strategies
AVOD can be considered a cheap way to reach viewers unlike any other advertising model. AVOD platforms do not charge their audience access fees; hence, marketers do not have to pay exorbitantly for placing ads. This is highly beneficial for small-sized advertisers who have a limited budget but wish to harness the wide-ranging potential of video ads.
Advertising at lower cost per view: Due to the nature of AVOD, advertisers can now get their videos seen by large numbers of people at lower costs, targeting audiences as opposed to traditional TV advertising or subscription models.
Diverse pricing strategies: Many AVOD platforms can reasonably provide price options that include programmatic ads as well as demand generation, allowing marketers to control their spend.
Elevated Interaction with Viewers
The high level of interaction offered to viewers is one of the best features of the AVOD approach. The ad recall chances are augmented once the ad content is served to engage AVOD users because they are engrossed in what they are watching.
Intention-based viewing: TV can be passive watching; however, content on AVOD platforms usually requires people to be active users. Viewers are more attentive to the content, which means there is a greater likelihood that advertisements will be remembered.
Ad personalization: AVOD platforms have the ability to use a pool of information to customize the advertisements that are issued to viewers. This greatly improves the relevance and engagement of the message with the viewer.
Availability of Data for Performance Marketing
AVOD platforms are data-rich environments, and this is beneficial to advertisers, as it allows them to glean insights necessary for enhancing ad campaigns. For instance, the advertiser’s analysis of viewer behavior greatly informs how ad targets can be achieved.
Granular audience insights: AVOD platforms collect the type of materials, including audience viewing preferences, the historical records of their activities, performance, and behaviors for a better advertisement.
Real-time performance tracking: Being able to assess the success of ads at the same time as strategies are being executed gives them the opportunity to quickly adapt their strategies for better results. And this is of great importance with regard to campaign management in a performance marketing context.
Flexible Ad Formats
The use of AVOD platforms enables advertisers to have a variety of options when it comes to the formats they wish to enhance their reach, including pre-roll, mid-roll, and post-roll ads, in contrast to always being limited to one set format. Such adaptability creates an opportunity for AVOD to be used as a good base for a multi-leveled campaign addressing the broadening of various types of objectives.
Video and interactive ads: Advanced features such as interactive video ads or shoppable ads are supported on many AVOD platforms, allowing advertisers credible direct engagement with viewers in a bid to enhance conversions.
Cross-platform integration: via connected TV to mobile advertising, AVOD has made it possible for brands to reach viewers without worrying about where the viewers are physically located.
Barriers AVOD for Advertisers
Ad Fatigue
It’s inevitable that ad fatigue will be both an agnate byproduct of and a hindrance to the growth of the AVOD model. Some viewers may have grown frustrated with the idea of watching commercials and, as a result, may begin to ignore them or develop skepticism towards commercials, which can impede the outcome of advertisement campaigns.
Frequency management: Advertisers need to manage the frequency of their bookings as well in order to prevent flooding the viewers with content. Too many advertisements in quick succession lessen the quality of customer experience, which in turn may affect the effectiveness of the ads themselves.
Ad blocking issues: AVOD providers are not experiencing similar issues as the providers of digital platforms do, but with mobile AVOD, advertising blocking software may still be an issue.
Advertising Placement and Context
Placement of the advertisement is another area in which marketers face difficulty. Most AVOD services are supplied through automated means, and therefore, the context in which advertisements are shown may not be appropriate for viewers, taking into account the intended message and target audience for the product.
Relevance of ad placement: The content of ads, such as their videos and images, sometimes tends to clash with the interests of their target audience as well as the values of the brand. This, in turn, lowers the effectiveness of the ad.
Ad targeting challenges: Although the AVOD tools around ad targeting are very precise, they may still not be as extensive as the tools self-serve adverts and social networks have, meaning that certain types of advertising campaigns may not fully benefit.
Campaign Effectiveness and Advertisement Complexity.
In spite of the fact that there is an assortment of information that can be sourced from an AVOD platform, evaluating how effective advertisement campaigns are and working out which ads were responsible for numerous quote opportunities could still be very difficult.
Cross-platform measurement: Since AVOD ad campaigns are run on multiple channels, such as CTV OTT and Mobile, for example, looking at how well the ad is performing on multiple devices becomes more difficult.
Attribution difficulties: As is the case with many models using multi-touch attribution, AVOD tends to be complicated when it comes to measuring the particular ad that caused a given view, especially since there is significantly more than one option that brought the user to see the ad in the first place.
Viewing Experience and Ad Avoidance
The viewers of AVODs have the choice of ad avoidance enabling viewers to skip ads while watching content or simply watch content ad free if it’s available. Viewers might be open to watching content for free, however, they might not be interested in viewing ads unless the content is engaging enough or the ads are targeted properly.
Skipping behavior: Still some of the AVOD’s may not have the restriction of 15 seconds so that viewers can skip ads which in turn means limited exposure of the ad and weakened effects.
User experience: Excessive ad exposure can result in ad fatigue resulting in a poor experience for the user potentially leading to the user switching to other platforms with lesser ad exposure or ad free content.
Attention Competition
The skyrocketing in the number of AVOD platforms has further ignited the competition for viewer’s attention making it even harder for advertisers to advertise their products as there are more brands on the same platform.
Ad content over saturation: With the rise in more AVOD platforms, the advertiser’s battle for viewer’s attention is on the rise, resulting in ad campaigns being less effective.
Creative content formation: Advertisers will have to think innovatively with their creatives in such a manner that their messages would stand out to viewers, especially in today’s time, who are used to numerous adverts.
Conclusion
On the one hand, AVOD provides advertisers with an inexpensive scaling strategy for penetrating large and motivated audiences that greatly enhances the opportunity for frantic reach. However, a cascade of other issues also arises in connection with the introduction of AVOD advertising, ranging from measuring viewership to ad context and even to ad fatigue. Advertisers need to overcome such issues but at the same time utilize the audience data, flexibility, and the option to advertise over the multitude of platforms AVOD provides. Likewise, SVOD (Subscription Video on Demand) also offers more possibilities to advertisers but in a different respect, mainly in the form of direct access and subscription. Knowing the merits and weaknesses of both AVOD as well as SVOD, it is possible to benefit from these new advertising modalities in a new world which is dominated by hyper-digitalized and demand senses.