THE AVOD ECOSYSTEM: As cord-cutting shifts the revenue model of media companies, the ad-supported streaming space is poised to take off — here are the key players brands need to know, and how to work with them

avod marketers adjust video ad spending

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The video streaming marketplace has expanded to include a widening set of ad-supported OTT video platforms, across both free and hybrid (subscription-based and ad-supported) offerings. And, as these services grow, ad-supported OTT will become an increasingly important channel within media plans as a way for ad buyers and brands to add incremental reach to their linear TV campaigns. 

A wave of new movement in the ad-supported streaming video space has accelerated over the past 12 months:

In 2019 and early 2020, media companies including ViacomCBS, NBCUniversal, and Fox Corp. have each acquired free, ad-supported TV services, including Pluto TV, Xumo, Vudu, and Tubi. 
Meanwhile, after Disney gained majority ownership and full operational control of Hulu last May, NBCUniversal and AT&T’s WarnerMedia each announced plans to launch their own ad-supported SVOD services — Peacock and HBO Max, respectively — which are each forthcoming. (At launch, HBO Max will be ad-free, but will have an ad-supported tier sometime in 2021.)
Further, CTV device-makers including Roku, Samsung, and even Amazon have increasingly emphasized their own advertising inventory. The majority of ad sales that go to each company come from CTV inventory sold on other publisher apps carried on their devices: Roku and Amazon each take a 30% cut of ad sales from inventory sold on partner apps. But a portion of advertising revenue has also resulted from increased viewership on their own free AVOD platforms that are integrated into and prominently displayed on their devices, including The Roku Channel, Samsung TV Plus, and to some extent, Amazon’s IMDb TV. 

OTT video advertising offers some benefits over linear TV to advertisers looking to reach audiences on premium video content — but brands and media buyers still face several frustrations with advertising on ad-supported OTT. OTT video advertising is considered to be more efficient and less wasteful compared with traditional TV because it’s more addressable — meaning it has more granular, audience-based targeting capabilities. But advertisers must also navigate several challenges that will impact their strategies in this area. These challenges include considerable fragmentation in the long tail, low service differentiation among some AVOD services, a lack of standardized measurement, and a confusing assortment of different ways to buy the same or similar inventory.

In The AVOD Ecosystem, Insider Intelligence examines the expanding range of major, growing, emergent, or forthcoming ad-supported OTT services in the US. We look at how ad spending is growing on ad-supported streaming, based on the rise of connected-TV advertising, and why cord-cutting is likely to drive additional spend. We further assess the state of consumer interest in AVOD in the US, in terms of the share of time spent with streaming video and user growth, and identify how multiple factors including the coronavirus are boosting usage. Finally, …read more

Source:: Business Insider


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