Who’s Watching AVOD? Reaching An Emerging Audience

AVOD audience

 

Ad supported video on demand (AVOD) is growing, with more content – for instance, NBCUniversal’s Peacock launches this summer – as well as more viewers.

Forty-five percent of people who regularly watch online video tune into ad-supported services, according to the IAB.

Still, AVOD isn’t ubiquitous yet, so who can advertisers actually reach today?

Here’s a look at the AVOD audience, and how brands should plan their campaigns as they spend more on ad-supported streaming platforms.

Younger-skewing, and not as affluent as SVOD viewers

Advertisers can expect to find “a solid cross-section of younger America” streaming AVOD content, said Brad Geving, VP of media buying operations at the agency Tatari.

Most AVOD streamers are 18 to 34, according to SpotX, and 73% of people in this demo report watching mostly AVOD content, per the IAB.

But with COVID-19 lockdowns decimating the economy, more people over the age of 55 are embracing AVOD as a cheaper alternative to subscription video on demand (SVOD) services, Geving said. Brands trying to reach older demos can also benefit from AVOD buys by exposing themselves to younger family members who influence their parents’ purchasing decisions.

“The inventory available for [the 55+] demo will be less than other demos, but you can find that audience,” Geving said.

While subscription video on demand (SVOD) viewers tend to have higher household incomes on average, more than half of the people SpotX reaches with CTV ads have a household income of more than $75,000.

AVOD supplements SVOD, and Roku leads the way

Plus, many people consume both AVOD and SVOD content. People on average pay for up to three SVOD services before supplementing with AVOD viewing, according to Nielsen.

“People are spending enough time on AVOD in addition to a subscription service,” Geving said.

More than 13 million people watching ad-supported TV are doing so on Roku, according to ad tech company LoopMe, which measures 20 million CTV devices. Roku is followed by Samsung with 2.5 million AVOD viewers, Amazon at 2.2 million viewers, Apple TV with 565,000 viewers and LG, which reaches 252,000 AVOD viewers.

AVOD drives incremental reach or DR goals

The AVOD opportunity is increasing for brands, but linear TV is still king when it comes to delivering reach.

So advertisers are finding AVOD a useful driver of incremental reach against the cord-cutting audience, which eMarketer projects will reach 61.5 million Americans by 2023. Roku is even guaranteeing incremental reach to buyers in its upfront pitch this year.

“The beauty of AVOD is that you can utilize data when purchasing,” said Diana Bernstein, EVP of video investment at Havas Media. “We are tapping into what it can provide in terms of audience targeting and incremental reach.”

But AVOD is also appealing to direct response brands looking to drive concrete outcomes. Buying through platforms such as Roku or Vizio Ads, which sell a slice of inventory from content providers on their platforms, buyers can target granular audiences, measure results and acquire customers they couldn’t get on digital.

“You can place a pixel on the site, accumulate an audience, retarget them in streaming and characterize them into look-alike audiences,” Geving said.

Strategize around the lack of frequency capping

AVOD services are notoriously bad at frequency capping, often inserting the same creative in multiple ad breaks within the same show (and driving viewers nutty in the process).

That’s because the OTT ad sales landscape is so fragmented, and multiple companies often sell the same inventory, from networks such as NBC and CBS, to vMVPDs including Fubo TV and Sling to OTT platforms, for example, Roku or Amazon.

“Inventory splits are problematic,” said Innovid co-founder and CTO Tal Chalozin. “You can reach the same device, in the same ad break, through multiple sellers.”

Without the ability to manage for frequency, brands should tailor their targeting strategies based who they’re buying from. When buying directly from a network, such as Discovery or Fox Sports, brands should remember that the audience is based on who the content appeals to. Aggregators, on the other hand, can deliver a more uniform cross-section of AVOD viewers, Geving said.

Brands buying AVOD should also be wary of a lack of visibility into where their ads are running, especially when buying through an aggregator. To manage for frequency across AVOD sellers, Havas Media’s investment team works closely with its programmatic buyers to deduplicate audiences, Bernstein said.

“We can understand who we’re buying on a direct IO vs. through the desk and where overlap comes from,” she said.

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