With the popularity of OTT platforms constantly high, publishers see video ad monetization as an opportunity to generate more revenue. Publishers can choose between three prominent monetization models, among which AVOD (advertising video-on-demand) stands out from the rest due to its free user access to content. In this article, we’ll cover the most important benefits of the AVOD monetization model.
Rising Popularity of AVOD Platforms
The AVOD market size has significantly expanded in recent years. More and more household names are finding success with AVOD. For instance, IMDb TV tripled its active user base in two years, leading to its complete rebranding as Amazon Freevee and new in-house productions.
Customers are increasingly shifting to streaming ad-supported premium content, and we have developed Freevee to deliver them highly sought content with half the commercials of traditional TV.
Ashraf Alkarmi, Director of Freevee
What’s more, Fox’s free ad-supported streaming service Tubi reached 64 million monthly active users as of February of this year, becoming the most viewed AVOD platform and a strong competitor for subscription-based services such as Netflix, which has recently seen a decline in subscriptions.
What Is AVOD?
AVOD is an ad-based video monetization model widely used in the VOD streaming industry. Unlike SVOD, which requires users to pay a fee (monthly, yearly, etc.), and TVOD, which works on a pay-for-view basis, AVOD is entirely free for users. Publishers earn money by displaying ads within their content, i.e., by selling ad inventory to advertisers. Revenue is generated based on the number of ad impressions or clicks an ad gets.
Why Choose AVOD?
As global digital ad spending increases year by year, it’s the perfect time for publishers to utilize AVOD to the fullest. Here are the reasons why publishers should choose AVOD as their primary monetization model.
Easy to Implement
To get started with AVOD all you need is some general knowledge of ad ops and a quality ad network. Ad network platforms mediate the ad distribution process between publishers and advertisers by matching advertisers who want to display their ads with publishers who have available ad space on their websites, mobile apps, or other digital platforms.
They usually provide additional services such as targeting, ad delivery, and performance tracking. The entire implementation process is quite simple, unlike with SVOD and TVOD, where you have to integrate different payment models and employ a paywall, payment security, and so on.
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Great for Beginner Publishers
Chances are users won’t be willing to pay subscription fees to unheard-of publishers. So for beginner publishers who don’t have an established audience, AVOD is a great way to attract new users, as AVOD allows users to watch video content for free.
Higher Viewership
SVOD and TVOD monetization models limit the publisher’s audience reach. Many online users nowadays prefer ad-supported free content rather than pay-to-view content. According to IAB, 80% of surveyed users don’t mind watching ads in exchange for free access. Since AVOD platforms are free for users, they give publishers a broader audience pool resulting in higher viewership.
Ad Display Flexibility
Publishers can choose what type of ads (e.g., pre-roll, mid-roll, overlay, banner, etc.) they want to serve to users, as well as when and how. This makes for a more dynamic delivery, as ads can often be bothersome to viewers. In addition, by using various ad formats, publishers can test and see which ads perform the best on their websites. This allows publishers to regularly optimize their strategy and focus on delivering ads that bring in the most revenue.
Learn More About Ad Formats: Instream vs. Outstream Video Ads
Revenue Optimizing and Boosting
The biggest advantage of AVOD is the amount of potential revenue publishers can generate from selling ad inventory. For instance, publishers can set different prices for different ad formats and placements. This can sometimes be challenging to do on your own, however, there is a way for publishers to make sure they are getting the most out of their inventory — utilizing a price floor optimizer.
TargetVideo’s Price Floor Optimizer uses real-time data analysis and advanced yield algorithms to dynamically boost price floors to their optimal values. By employing the optimizer, you’ll be able to maximize revenue from your ad inventory.
Works Well With Other Monetization Models
Publishers don’t have to be limited to one monetization model. By combining AVOD with other monetization models, publishers gain multiple revenue streams. For instance, you can have AVOD content but an optional subscription fee that allows users to enjoy their videos ad-free or employ an optional paywall for users who want to access more exclusive content.
AVOD Made Easy with TargetVideo’s Managed Ads Service
With TargetVideo’s Managed Ads Service publishers have an expert ad ops team at their disposal. Our professionals will manage your ad stack for you and help you achieve the highest ad yield possible.
What’s more, as a part of our Yield Optimization Engine, we offer our Prebid Price Floor Optimizer that automatically calculates the best price floors for each prebid auction based on detailed analytics. Maximize your inventory earnings with TargetVideo.
Experienced Ad Ops Team
Personalized Ad Stack Management
Advanced Ad Tech
Yield Optimization Engine
