AVoD to pick up speed in 2019
Advertising-funded video-on-demand (AVoD) – think Now TV, Hulu and Sony’s Crackle, as well as growing interest from Amazon – is still very young compared to other media. But, advertisers are fast beginning to see its future potential.
Subscription video-on-demand (SVoD) services like Netflix have been garnering plenty of attention as they colonise global living rooms. But, competition is also starting to heat up in for online video ad spend.
So much so that it is outpacing other media with spend set to double to $47bn by 2023 worldwide, according to Warc.
The expected $23.8bn in brand investment that AVoD will receive this year equates to a 5.2% share of global ad spend, which is increasing year on year. And as a percentage of total over-the-top (OTT) spend (an estimated $68.7bn in 2018, according to Digital TV Research), AVoD will account for 34.7%.
“Consumers’ voracious appetite for video content anywhere, on any device, has been propelled by SVoD services such as Netflix. But it is AVoD platforms which present the opportunity for advertisers to marry rich consumer data with pinpoint targeting during engaging content.
This is why AT&T and Amazon are exploring moves into the AVoD sector next year, with the ultimate aim of taking the lion’s share of a market expected to be worth $47bn by 2023.”
James McDonald, data editor, Warc.
AVoD platforms present the opportunity for advertisers to marry rich consumer data with pinpoint targeting during engaging content.
Indeed, Amazon kick-started speculation in the summer when it posted a job ad looking for a UK-based executive to lead an ad-funded free-to-air TV offering.
An ad-funded platform, Pluto TV, has also just launched on Now TV in the UK.
For brands, this means a potential explosion of new online video inventory that can host both traditional TV spots and creative tailored for the medium. For broadcasters it’s imperative to keep pace with newer platforms.
“The UK’s broadcasters and pay-TV providers remain in a strong position,” says Jon Watts, managing partner at MTM.
“[They] have developed world-class OTT products – the BBC iPlayer, All4, the ITV Hub, My5 and Now TV – but we’re clearly seeing signs of significant shifts in consumer attitudes and perceptions of quality, in terms of content, value for money and innovation.”
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