BRAVE NEW AD

The reason for the high popularity of AVOD services is very simple: there are always viewers who cannot or simply do not want to pay for video content. Ad view in exchange for access to interesting materials is perceived as a natural course of events and the fairest way of interaction.

It is worth noting that this model is not new. It has been used for a long time by television and radio and has become familiar to consumers. But in spite of the fact that the idea of monetisation with the help of ads is not innovative, modern methods of content delivery make it more profitable and convenient.

The advantages of AVOD over traditional positioning methods (linear TV, radio):

The possibility of targeting

AVOD replaces quantity with quality. Having more accurate data about the audience, an advertiser sets up the ad impression so that only those who will benefit from the promo will see it.

High ROI indicators

The cost per impression is lower than on linear TV, with efficiency being higher. Therefore, an advertiser receives more target customers for a smaller amount.

Fast and accurate statistics

You do not need to wait for the end of the campaign to evaluate its results. You can quickly optimise the media plan and achieve better results.

High demand from both users and advertisers has become a real catalyst for the growth of the AVOD segment. Starting in 2012, just in the USA, the revenues of providers have increased almost fivefold and are projected to continue to grow at an equally rapid pace until 2021.

The perfect payment model

Preferences as to how and what advertising to watch vary depending on the group of viewers a user is in. For example, representatives of the Average TV Joe category, those who spend an average amount of time watching TV, would be most positive about sponsorship content. Simultaneously, the fastest growing group of consumers, the Mobility Centrics, would quietly view ads if they are customised and interesting.
Almost a third of all users are willing to pay a modest amount to disable advertisements or reduce their number.

The focus on efficiency

Since the main source of AVOD revenue is advertisers, the success of the service will largely depend on the effectiveness of the broadcast advertising.
The key indicator for campaigns aimed at increasing sales will be ROI. In other words, a campaign will be deemed successful if the revenue from conducting it sufficiently exceeds the expenses.
For reputational campaigns, different metrics will be important: audience coverage, its engagement, and building of brand awareness.

Viewability

The best indicator of the effectiveness of video advertising is whether it has been played to the end. The television here is the undisputed leader, ahead of mobile devices by more than 30%.
The difference in results is due to the possibility of disabling ads. Most commercials on the desktop can be skipped after five seconds of viewing. On mobile devices, unskippable advertising is much more common. And in the case of linear TV, you can only get rid of the annoying video by changing channel.

86

Users aged 18–54 who watch TV at least five hours a week

2676

Commercials viewed

87

Android users aged 18–54 who watch YouTube every month

277

Commercials viewed
166 skippable, 111 unskippable

Engagement

Viewing and seeing is not the same thing. Blindness to advertising is a ‘diagnosis’ increasingly observed among viewers. As advertising becomes more intrusive, we learn not to notice it. For example, take a long time to look at a promo video without perceiving it at the same time.

Google and Ipsos have conducted a large-scale study using the eye-tracking technique.

The indicators of engagement are significantly different from regular views: mobile device users remember commercials much better than viewers. We tend to perceive advertising on our gadgets as more customised because ‘we hold it in our hands’ while watching.

The audience was divided into two groups:
— As part of the experiment, the first group watched TV for at least ninety minutes a day.
— The second group watched YouTube videos on mobile devices for at least forty-five minutes a day.