Advertising Video on Demand (AVoD) has done it. It has taken the top spot when it comes to paid media. And it has been projected that it could even reach $47B by 2023 worldwide, according to Warc.com. Which, is a nice chunk of pocket change.
Global Ad Trends: AVOD spend to double in the next five yearsWarc.com
What has led to the AVoD Rise?
There are a few things that we believe have helped to support this trend, so here are a few critical macro changes in the advertising space:
- Increased use of smartphones/tablets by consumers to watch videos
- Generational preferences to (SVoD – Subscription-based video on demand) services as primary means of tv consumption (i.e., Netflix)
- The ability for marketers “to marry rich consumer data with pinpoint targeting during engaging content.”
- Consumers willingness to watch advertising for free content
- Videos getting a better ROI than other social media marketing
78% of digital video viewers are willing to view advertising in exchange for free contentIAB’s 2019 Video Advertising Spend Report
IAB found “the largest AVoD audience segment is 18- to 34-year-old adults, including households with kids, that skews male.” This generation or segment of the population is altogether dropping cable services like a bad habit and supplementing with streaming services (SVOD) like YouTube and Hulu. Whereas, the older generation of Baby Boomers and some Generation X appear to be holding onto their cable services like a pension plan.
So it is easy to see why there has been this dramatic increase in spend and use. The ability to connect with your target market or demographic anytime, anywhere, is vital. And with all of the data available to advertisers today, it is possible to modify their ads with elements like time, location, device type, and more. It also helps to increase their campaign ROI.
AVoD Continues to Change Rapidly
Despite this emerging tactic becoming mainstream, it doesn’t mean that it has hit its stride when it comes to standardization and optimization. Quite the opposite, in fact. The video marketing trend is under continuous change. So much so, that it is becoming ever harder to stay on top of the trend.
What exactly are we talking about? Well, more specifically the constant change in consumer preferences, platform offerings, and advertisements. AVoD is a complex system that is constantly moving and adapting. Trying to figure out where it’s headed is like trying to find a chameleon. It’s there somewhere, but you sure as hell are going to have a hard time finding it.
One recent example of this is the new uptake of Stories across multiple platforms. This change in the format has made waves in the video advertisement space. Take for instance how that has now translated into YouTube’s skippable TrueView ads and Instagram’s immersive Stories ads. Even Twitter has jumped on the bandwagon recently by adding in-stream video ads.
But if you looked back less than two years ago, you’d never of know this was the direction they all were headed. Only Snapchat had stories as a part of their social media platform offerings. So being able to predict this change of a new platform to provide ad offerings, is more than challenging. And somehow advertisers must not only stay on-trend but also optimize content for these changes.
AVoD and the Future
The expansion of AVoD is a massive plus for advertisers, but it also presents its own challenges. First is the basic cost of video production. In the past, this has been high to go from idea to landing in front of the consumer. But now, the tools and equipment are becoming cheaper and simplified. Almost anyone with an iPhone and free video content tool can produce a short film of decent quality.
Second, advertisers can no longer just take a single video and plaster it across the web in hopes of engaging the consumer. Consumers react better to personalized content, so the challenge of producing multiple (polished) pieces quickly comes into play.
Last, to succeed with video, advertisers will need to optimize their pieces in two distinct ways: Delivery Format and the Platform. A good example of this is it is not just for a specific social network, but also for an organic video post versus a Story versus a paid placement.
So if you can find the hiding chameleon when it comes to AVoD you’re ahead of the curve. Just make sure you don’t hold on too tight and miss the new upcoming trend.
And if you are looking to make sense of this ever changing landscape, we can help. Our data driven procurement platform, RightSpend, holds video production data – one of ten agency types in the system – across 75 markets. So marketing and marketing procurement professionals can easily get to grips with industry marketing benchmarks in one space and in real time.