Almost two-thirds of global respondents in a recent online survey on video-viewing habits said they watch at least one form of video on demand (VOD) programming. This shows how online video content is taking over from traditional linear television offerings, like satellite and cable, worldwide.
The majority of top VOD services are divided between the advertising video on demand (AVOD) and the subscription video on demand (SVOD) model. Here is a quick look at AVOD vs SVOD, how they differ, and what those differences mean for advertisers.
Advertising VOD applies to ad-supported video platforms. AVOD offerings are monetized through ad revenue; hence it is usually free for the viewers. Content creators sell ad media to brands, which then target viewers with a high propensity to buy their products and services. Many people watching TV online have used AVOD services at one point or another. YouTube, Tubi Pluto TV, and Sony Crackle are just a few of the popular ones.
The subscription-based VOD model takes a different approach to content access. Viewers pay a fixed fee to watch content for a limited period. Netflix happens to be the biggest SVOD worldwide, with over 195.15 million paid users in 2020. The prices and content offered sometimes vary per region.
Many AVOD services offer the option to disable third-party ads in exchange for a subscription fee to their platform. In some cases, more features are added, including the coveted 4K video quality. That means that SVOD is often utilized as the premium version of the same platform. YouTube Premium is one example. There are higher quality productions behind the paywall.
Other VOD giants also use this subscription-based model. The likes of Amazon Prime Video, HBO Max, HULU, Apple TV, ROKU, Vimeo and other connected TV (CTV) and over-the-top (OTT) services have channels with monthly subscriptions.
Advertising opportunities: SVOD vs AVOD
SVOD services do have advertising. However, it is not that prevalent. In most cases, this is often limited to internal adverts for other content or channels on the same platform. Other publishers can promote their channels to increase their audiences.
The real home of advertising is AVOD and accounts for 21% of the video-sharing market share. Since AVOD services allow viewers free access to multiple channels, they are very lucrative to all sorts of advertisers.
Brands and other content creators can buy ad space to reach out to the channel’s audience. This can be done through ad agencies or brokered directly between advertisers and publishers using buying side ad platforms.
How advertising on AVOD works
AVOD streaming services offer a wide range of ad formats. Ad rolls can be placed at the beginning of the video, in the middle, or even the end. There are also non-skippable ads and banners with high viewability to ensure the audience doesn’t miss a thing.
Unlike traditional ad placements, advertisers can utilize targeted advertising to narrow down potential customers. It doesn’t just end with choosing publishers who align with their brand. Ad-configuration also ensures their media fits the publisher’s specifications.
Ad platforms provide ad campaign insights to advertisers. Not just the potential ROI of the ad placements, but also impression trackers which promote transparency. An advertising service like Allroll will empower you to access different KPIs and metrics for measuring brand exposure.
As streaming continues to grow, the appeal of AVOD and SVOD is unmistakable. Both garner a massive following as the most popular VOD services. However, when it comes to marketing, AVOD ticks all the boxes given the user stats and multiple publishers.