insights & news > Insights
Monetization of content through ads has made a big comeback. With revenue from ad-based video-on-demand services projected to surge over the next five years, it’s not surprising that video providers are considering the advantages of AVOD versus SVOD business models. The benefits of an AVOD monetization strategy are clear and many media businesses have already taken the plunge and launched advertising funded services. After taking such a significant step, their next move will naturally be to continuously expand and evolve their offerings. But how do you best grow an AVOD OTT business?
Since AVOD business models rely on ad revenue, providers will need to find the right balance between offering an attractive platform for advertisers while still delivering a great viewing experience for users. In this blog post, we’ll focus on some key steps you can take to keep both viewers and advertisers happy so that your AVOD OTT business is set up for both short and long-term growth.
Although viewers who sign up to an AVOD service will naturally expect a certain number of ads, no one is looking to have their viewing experience spoiled. Too many ad breaks will result in frustrated users who won’t think twice about switching off or moving to another service. It is therefore important to hit that sweet spot where you are generating enough ad sales to maintain and grow your business, while at the same time keeping viewers happy and engaged.
One way of doing this is to ensure that ads are as relevant as possible to the individual viewer. Streaming services offer great opportunities for personalization compared to traditional linear TV, which is why ad-based VOD content has become much more palatable for users. OTT services can access a huge amount of data about viewers, not just from their demographics but also from their buying and browsing activity. In order to grow their ad sales while keeping users happy, AVOD services need to expertly leverage this data so that ads are highly targeted. This naturally benefits users because ads are much more interesting and relevant, which makes the whole experience more enjoyable.
At the same time, advertisers also want their ads in front of the right consumers, targeting individuals who are the most likely to be influenced to buy the product or service. By leveraging available data about viewers, AVOD providers can offer an attractive opportunity for advertisers to get their message in front of the right people which ultimately will help achieve the full potential of ad space revenue.
It is not just ads that need to be highly personalized in order to keep users happy and engaged. The whole OTT experience needs to be customized from the point a user first opens the service through to content recommendations and the selection of what to watch. There are countless AVOD offerings out there, all available to users free of charge, so it is critical that your service is set up in a way where it feels highly relevant and engaging to each individual viewer. Adapting your service over time as user preferences evolve is also vitally important if you want viewers to keep coming back.
To create a more bespoke AVOD service, you need an in-depth understanding of your audience - from who they are, to what they find interesting, what they aspire to, and what they want. Only then can you ensure that the whole experience from content recommendations to ad provision is as personalized and relevant as possible.
In order to achieve this, you will once again need ample and accurate data. You will also need the right tools to analyze it and turn it into actionable insights. By collecting data on user preferences and behavior, and using it to influence your UX and product roadmap, you will be in a good position to provide a highly personalized and relevant experience that keeps users engaged.
Without the need to convince viewers to fork out hefty subscription fees, it should be easier for AVOD providers to attract bigger audiences (which, of course, is a very attractive prospect for advertisers). In fact, this is one of the benefits of running an AVOD business model. But viewers won’t stay or keep coming back if your service’s UX is substandard. As we discussed in a previous blog post, UX is so important that it can literally make or break a service.
At a minimum, users expect a video service to be easy to use. They don’t want to waste time working out how to navigate the service nor do they want to spend precious time searching through a ton of content to find something interesting to watch. It is critical that users can find what they want quickly and easily. All of this applies whether a service is AVOD, SVOD or a hybrid of the two.
To optimize your service’s UX, you need to know what is and what isn’t working by carefully measuring the impact of any changes or additions. By monitoring performance and impact, you can identify areas for improvement and make data-driven decisions that will help increase customer satisfaction.
Taking the time to develop a well thought-out monetization strategy should be at the top of every video provider’s to-do list. However, a good strategy is not stagnant but will keep evolving over time in line with market forces, consumer needs, and other business drivers.
An astute video provider will continually review the monetization strategy to ensure that it’s maximizing engagement opportunities. This may involve tried and tested routes to increase engagement such as expanding to new platforms and regions, as well as new ways to engage with users, including shoppable experiences, gamification, and immersive technologies. There may also be a call to review the actual business model itself, in the same way as leading OTT services have adapted their strategies to include ad-funded tiers. Could launching a carefully curated FAST channel for example, complement the existing AVOD service by providing a more leaned back consumer experience, appealing to a wider audience base?
Whether your service follows an AVOD business model or is a hybrid monetization OTT service, if you keep your audience and advertisers happy, you are well on the way to growing your service.
At Accedo, we can help you to achieve your goals at every stage of the AVOD journey, from strategy and conception, to delivery, post-launch optimization and growth. Get in touch to find out more.
tags
Share this article
Let's collaborate to define what is next for your OTT streaming service.
Contact us
