Estimated reading time: 3 minutes, 16 seconds

Adviser supported video on demand, or AVOD, is typically bypassed by certain media consumers who instead favor subscription-supported streaming services such as Netflix or Amazon Prime video.

Indeed, Crackle, which is often included on the home page for video streaming service Roku, can be a lesson in patience due to frequently repeated commercials that appear during movies.

Yet, a handful of heavyweight legacy media companies are entering AVOD as an alternative to subscriber-based services. In the process, they are creating attractive advertising opportunities for brands. However, marketers interested in pursuing AVOD campaigns are likely to face various technology challenges and other issues.

Just recently, Amazon announced it has launched IMDb Freedive, which will feature content such as TV shows “Fringe,” “Heroes,” “The Bachelor” and “Without a Trace” along with movies such as “Run Lola Run,” “Awakenings,” “Foxcatcher,” “Monster” and “Memento,” reports MediaPlayNews.

The service will be supported by advertisements, so it will be free to viewers. Currently, only a handful of AVOD television platforms exist.

Roku, for example, offers the Roku Channel in an attempt to capture viewers from among the 27 million individuals who use the Roku device to stream content. Sony, for its part, offers Crackle, while Walmart offers its own AVOD program called Vudu.

Amazon isn’t the only new entrant to AVOD, with NBCUniversal recently announcing that it is launching its own platform, reports CNN.

NBCUniversal believes its platform will have a competitive edge because it will feature rich content, such as “Jurassic World" and "Fast and Furious," as well as hit TV shows such as "The Office." The platform will also benefit from the company’s existing relationships with advertisers.

Viacom is also positioning for a potential foray into AVOD, reports Deadline Hollywood.

The company has reportedly explored acquiring Tubi TV, a free service partly owned by MGM and Lionsgate, and Pluto TV, which has secured financing from Scripps Networks Interactive, Sky, Third Wave Capital Partners and Samsung Venture Investment Corp.

New AVOD platforms could be attractive advertising opportunities for marketers, especially when considering that viewers can’t skip over promotional content. The platforms may also be free of advertising fraud that is occurring with digital display advertising.

However, challenges with using the platforms for campaigns exists.

Regarding the appeal of the platform, the Video Advertising Bureau (VAB) maintains that 73% of adults who stream video say they watch advertisement supported content, reports AdAge.

The statistic illustrates that AVOD could potentially reach cord cutters or other individuals who have yet to join subscription-based services, such as Netflix or Hulu. The appeal of advertising on AVOD, furthermore, is likely to have resulted in revenues for streaming media advertising reaching $2 billion in 2018. That would represent a 40% increase.

Brands that advertise on multiple planforms, however, may be unable to determine if the content is being viewed repeatedly by individuals who use numerous services. Another challenge is ensuring that content is compelling.

Indeed, viewers could become frustrated with waiting for commercials to download and, if the commercials occur too frequently, viewers could lose interest and consider spending $20 or $30 a month for a subscription video service.

AdAge reports that sausage company Johnsonville has taken a data-driven approach to keep its content relative. It has developed over 1,000 pieces of content and it uses weather data to provide personalized local forecasts to viewers. It even provides specific background images and city names based on individual viewers’ locations when pitching advertisements.

Other approaches to advertising exist. In the same AdAge article, David Cohen, president, North America at Magna, a division of IPG MediaBrands, says advertisers could consider sponsoring a movie night on AVOD platforms to build name recognition.

One encouraging note is that some media consumers may have a high threshold for viewing commercials if its means getting access to exclusive content. In that regard, AVOD may be an attractive complement to subscription-based services.

Brands will also have to implement technology solutions to distribute advertisements in a programmatic fashion.

Last modified on Saturday, 19 January 2019
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