Overcoming the Obstacles of AVOD

It’s no secret that Ad Supported Video on Demand (AVOD) is on the rise. Even with the current momentum, many providers are quickly realizing the challenges that exist in this monetization model.

Whether pivoting from a subscription model or getting started with streaming video, Caretta Research has noted that AVOD is a major commitment in both technology and resources. Furthermore, maximizing the revenue potential requires a new level of expertise, not to mention continued investment and experimentation as the industry navigates through this transformation.

For the unprepared, the obstacles to building a successful AVOD strategy are significant. But for those ready to tackle the technology, data, and operations challenges, AVOD offers more than commensurate benefits.

Technology Considerations

Having the appropriate technology is necessary, but knowing how to establish an ad tech stack that will empower revenue results without waste is the real challenge. Media companies entering into AVOD should strive for the right mix of flexibility and sophistication while keeping cost and integration efforts in mind. The following principles can help ensure a strategy is both effective and efficient.

• Select specialists. Focus on the systems and tools that are pivotal to your streaming environment. If FAST is the focus, choose ad servers, channel facilitators, and technology providers specializing in this space rather than those built primarily around the web.
• Prepare for fraud. Particularly in CTV environments, ad fraud is a growing concern and poses the risk of disruptive user experiences, bad ads, and damaged advertiser relationships. For example, a larger inventory can provide more opportunities for fraudsters to insert fake or low quality ad impressions, leading to wasted ad spend and less effective ad campaigns. Leveraging SSAI can mitigate ad fraud, especially when using a platform that handles SSAI in-house as opposed to a third party. SSAI is also an optimal ad insertion technique for maintaining a seamless viewing experience without excessive ad loading delays.
• Prioritize load times. Too many intermediaries, a slow content delivery network (CDN), and suboptimal video encoding processes can significantly affect load times. Optimizing for a smooth playback will minimize user frustration and maintain viewer engagement.

Data Considerations

Unified data paints a holistic picture, which informs accurate projections for future decisions. That’s why interconnected ad tech systems are critical: they need to pass information to and from one another and in similar fashion. Providers investing in smart data tools will be able to see which metrics are most important not just to ad revenue, but the entire viewer experience. In turn, businesses can achieve growth in revenue and engagement without compromising one or the other.

It’s equally important to consider the information made available to tech partners. Not only are transparency and privacy a must, so is signaling. Content, audience, and other identifiers allow marketplaces to be selective in their buying and empower packaging for internal sales teams. By harnessing data for targeting, AVOD platforms can enhance user experiences by increasing ad relevance and drive engagement—benefiting viewers and advertisers alike.

Operations Considerations

Like any other kind of advertising, sales operations in AVOD requires a well thought out structure with the right mix of talent. Inventory management, pricing and packaging, sales support and training, and reporting and analytics are all important factors to be considered.

However, due to the unique nature of video content consumption, AVOD differs from web-based operations. Since this is not an area of expertise for traditional ad ops teams, it’s imperative they understand several aspects unique to the video landscape.

• Video formats. AVOD platforms deal primarily with video content, requiring specific considerations for video ad formats. Ad ops teams need to ensure seamless integration of video ads within the content, maintaining visual and audio quality while optimizing for different devices and screen sizes.
• Ad insertion and timing. Ad ops teams must strategically determine the placement and timing of these ads to balance user experience and ad revenue. They also need to manage repetitiveness and maintain diversified ad content to curb viewer fatigue and ad avoidance.
• Content categorization and targeting. Ad ops teams must understand the content taxonomy and audience preferences to accurately target and deliver relevant ads. Unlike web-based ad operations, AVOD platforms can leverage video-specific targeting capabilities. For example, they can utilize contextual targeting based on video metadata or dynamic ad insertion based on user behavior within the video stream.

When it comes to sales methods, direct sales and programmatic have their advantages and may coexist within AVOD platforms. Direct sales allows for more control and customization and is well suited for premium ad placements or specific partnerships, providing greater flexibility in pricing and targeting. Programmatic offers automation, efficiency, and access to a larger pool of advertisers.

Partner Considerations

Monetizing media with a video ad marketplace requires yield management expertise and contracts with DSP and SSP partners. It takes time to implement and produce results, not to mention the need for optimizations over time. Depending on the sales approach, the right alignment of operational support will also need to be put in place.

To get the most out of an AVOD strategy, buyers need to beware that not every partner will have the experience or offer the support needed. Before deciding on a partner, make sure they have solutions for the key obstacles, because anything they can’t do is something you’ll need to learn fast to succeed. If that’s too much pressure to take on your own, Brightcove’s Ad Monetization service can manage the entire experience for you from start to finish.