As more viewers continue to cut the cord, CTV and AVOD are gaining more ground. This is not a ruse. Digital TV Europe recently predicted Global AVOD expenditure would double to surpass $53bn by 2025. And that’s not all that’s being said concerning the future of video ads globally.
Video is the king of the digital age
Content creators today are taking every opportunity to showcase the value of video. But is this what’s really on the ground? Deloitte released findings from last year showing that in the US, 78% of people watch videos online each week. The figure for those that do so daily stood at 55%. But, with the pandemic confining people into their homes, it’s safe to say these numbers have gone even higher in 2020.
Before COVID-19 forced a worldwide lockdown and travel restrictions, 73% of the US VOD market was using paid streaming services. This is already a significant indication of the potential video has. Add to this a 9% increase to 58 481 000 households now accessing ad-supported video streaming services. It’s crystal clear that video distribution platforms have become green pastures for both publishers and advertisers.
Globally, the number of CTV devices has risen to 1.1 billion, thus increasing the audience size of content publishers have. Every 1 in 3 CTV users reportedly chooses AVOD services when streaming, meaning advertisers can get the exposure they need from ads placed on such channels.
At present, ad spending, the key indicator of growth in CTV advertising is predicted to rise even higher since more money is being diverted from broadcast and cable tv. Experts are looking at an average spend of 16 billion per year. Current trends reveal that retail, media, and the telecommunication industry are the biggest advertisers on CTV.
Popular video distribution channels
The most prominent channels for video advertising happen to be giants that have been around for a long time. The list includes YouTube, Vimeo, and other miscellaneous CTV. One of the newcomers, TikTok, has seen tremendous growth to over 850 million users in the third quarter of 2020 alone.
CTV has proven time and time again to be something both publishers and advertisers shouldn’t take lightly. With CTV penetration reportedly at 80% in 2020, it’s pretty obvious this is where the crowds are. Content creators are gaining more opportunities as branded channels are also part of the CTV trend.
None of this is just hype. In 2019, $ 7,998 million was poured into the market by US advertisers who were hoping for returns towering traditional television channels—which of course, CTV was able to deliver. Right behind the US was China, spending $ 6,777 million, ahead of the UK, Japan, and India. In 2020, the US ad spending budget is projected to be even higher.
What does TV advertising entail today?
So, what should we be expecting in 2021? Well, there are many factors to consider, but things are looking pretty good for video content distributors and advertisers both.
Traditionally, television programming has followed a linear style whereby there is a fixed schedule. Today, advancements in technology allow for flexible television, widely known as on-demand. This non-linear approach encompasses VOD and SOD, allowing more capabilities in terms of advertising.
Benefits of advanced television
The benefits of CTV advertising include the following:
- Targeting
Advertisers are looking at data-driven target marketing for their ads. You are advertising directly to people within your target market and most likely to buy your product or services. Imagine an auto parts dealer advertising to people who are watching content for restoring vintage cars. Your product is as good as sold the next time the audience needs new parts. In fact, research shows people can remember 95% of the information they consume via video.
- Unskippable ads
The option of unskippable ads is an argument some executives would want to bring in when faced with advertising budget allocations. Unskippable ads on CTV are not the world’s best-kept secret. With CTV, you can get linear advertisements that run in line sequentially with the content being watched. This can be before, during, or after the video is over. Marketing executives need to look beyond the Youtube model and realize that there is more to video.
- High viewability
Like everything else in the world of advertising, ROI depends on the numbers a channel is pushing. You are looking at how many people are actually seeing your adverts. According to MRC guidelines, viewability is measured based on at least 50% of an ad’s area being visible on the screen for at least 1 second. AVOD has high viewability as the majority of ad formats are full-screen. Others like banners are generally placed directly on the screen as a best practice. Placing the advert where one has to scroll to it is not the industry standard.
- A positive approach from the viewer
With video, you are looking at content that keeps the people engaged for however long the delivery is. It’s always important to assess your audience so that you deliver a clear message. With advertising, people have expressed negative attitudes toward ads in recent years. However, personalization has become key to breaking down the barriers between advertisers and viewers. Reaching out to viewers who, according to historical viewership data provided by publishers, have used your services as a guaranteed positive impact.
Catching up to the trends
The numbers don’t lie. By now, you probably agree that video outside of social media is drawing large viewerships. In 2020, AVOD is bigger than cable. And it’s still providing advertisers with high ROI digital real estate. AVOD offers as much exposure as traditional television through its multiple ad formats. This is what businesses are buying into. Viewers are okay with watching ads for free content; hence AVOD has more viewers than paid tv like SVOD. The following ad formats have gained much traction:
- Bumper ads
Bumper ads are quite popular with advertisers. They are non-skippable video ads, up to 6 seconds, that must be watched before a video on a VOD platform can be viewed. This offers a great way to catch the viewer while they are still attentive to what’s going on on the screen.
- Linear video ads
Linear video ads are much like bumper ads, but longer. They can be 15 to 30 seconds long. When the ad plays, it covers the full video player space. The viewer cannot fast-forward or skip this kind of ad. However, note that although they are quite popular with advertisers because of the higher engagement, they also have high stats for viewer abandonment.
- Overlay ads
Overlay ads are banners that only partially cover the screen as the video plays. Typically the area covered is 20% of the video frame. Your overlay ad can be in the form of videos, images, or text to advertise your product. Overlay ads are effective for boosting brand awareness, as they are short and precise.
- Rewarded Video ads
You might already be familiar with the use of rewarded video ads in mobile games. These types of ads are also used in CTV apps. For example, a user can be offered an hour of uninterrupted streaming if they watch a 30-second ad. The ad has increased visibility, and this tactic also helps drive up click-through rates.
If you feel you missed out on the boom when nationwide lockdowns were keeping people glued to their screens more, you’ll be happy to know that these video-viewing habits may not be going anywhere anytime soon. According to surveys on CTV trends, it’s pretty clear that 85% of people are not planning on canceling their subscriptions to streaming services.
Vlogbox can get you what you need to ride the wave in CTV ads. The Video Monetization Platform enables content owners to get more for their content without the limitations of platforms like Youtube. The services offered include hosting, encoding, and streaming of video content along with custom app development. When the Riki Group, a Russian animation company, needed CTV apps, the Vlogbox team made it all possible. They have also helped Watch Jojo expand beyond Youtube to FireTV, iTunes, and Roku with over 16000 app installs.
Companies also use Vlogbox to set up branded channels that provide marketing services in addition to development and maintenance with no upfront costs.
What are branded channels?
Branded channels are helping businesses make more headway with video-oriented advertising. Instead of relying upon slots on others’ channels, you can choose to open your own channel dedicated to your company or product. For example, branded channels on youtube offer more viewership insights and the ability to customize the channel in ways a personal youtube account can. You can share videos of product launches, product demos, webisodes, tips, how-tos, behind-the-scenes content, and more. Nintendo, Ubisoft North America, and Mazda USA are just a few of the brands taking this route.
The Takeaway
The CTV market is ripe for advertisers and content creators of all sorts. There is much to be gained from efficient ad monetization and the use of the right formats. CTV devices currently span across desktops, smart TVs, and mobile phones; hence the possibilities are endless when it comes to channels and delivery methods. Both distributors and advertisers can take notes from this article on how to make the most of the opportunities CTV presents. All the best!)
EDITED VERSION
From innovative ad formats to branded channels: video and CTV expectations in 2021
As more viewers continue to cut the cord, CTV and AVOD are gaining more ground. Digital TV Europe recently predicted Global AVOD expenditure would double to surpass $53bn by 2025. And that’s not all that’s being said concerning the future of video ads globally.
Video is the king of the digital age
Content creators today are taking every opportunity to showcase the value of video. But is this what’s really on the ground? Last year, Deloitte found that in the US, 78% of people watch videos online each week. The figure for those that do so daily stood at 55%. But, with the pandemic confining people into their homes, it’s safe to say these numbers have gone even higher in 2020.
Before COVID-19 forced a worldwide lockdown and travel restrictions, 73% of the US VOD market was using paid streaming services. This is already a clear indication of the potential that video has – and add to this the 9% increase to 58,481,000 households that can now access ad-supported video streaming services. It’s crystal clear that video distribution platforms have become green pastures for both publishers and advertisers.
Globally, the number of CTV devices has risen to 1.1 billion, thus increasing the audience size of content publishers have. Every 1 in 3 CTV users reportedly chooses AVOD services when streaming, meaning advertisers can get the exposure they need from ads placed on such channels.
At present, ad spending, the key indicator of growth in CTV advertising is predicted to rise even higher since more money is being diverted from broadcast and cable tv. Experts are looking at average spending of US Dollars 16 billion per year. Current trends reveal that retail, media, and the telecommunication industry are the biggest advertisers on CTV.
Popular video distribution channels
The most prominent channels for video advertising happen to be giants that have been around for a long time. The list includes YouTube, Vimeo, and other miscellaneous CTV. And today, social media is also gravitating more toward video content. A good example is how Facebook and Instagram added video Livestream capabilities. The introduction of Facebook Watch and IGTV is evidence of the popularity of video content online. Even one of the newcomers, TikTok, has seen tremendous growth to over 850 million users in the third quarter of 2020 alone.
CTV has proven time and time again to be something both publishers and advertisers shouldn’t take lightly. With CTV penetration reportedly at 80% in 2020, it’s pretty obvious this is where the eyeballs are. Content creators are gaining more opportunities, as branded channels are also part of the CTV trend.
None of this is just hype. In 2019, nearly $8 million was poured into the market by US advertisers who were hoping for returns that would top traditional television channels—which of course, CTV was able to deliver. Right behind the US was China, spending nearly $7 million, ahead of the UK, Japan, and India. And in 2020, the US ad spend budget is projected to be even higher.
What does TV advertising entail today?
So, what should we be expecting in 2021? Well, there are many factors to consider, but things are looking pretty good for video content distributors and advertisers both.
At present, growth in ad tech is at an all-time high. Dominating trends in the world of video are mainly centered on live streaming. As of 2020, live video news coverage and social media streaming has significantly helped grow penetration rates for online video content. The number of viewers accessing live content in the USA is expected to reach 56% by end of the year.
Consequently, ad budget spending on streaming content is also on the rise. A popular platform like Roku has already broken new records, attracting a growth of 45% in ad spending. The CTV/OTT ecosystem is beckoning content creators who are looking for sustainable revenue streams.
Last but not least, while traditional television programming has followed a linear style whereby there is a fixed schedule, today, advancements in technology allow for flexible television (on-demand). This non-linear approach encompasses VOD and SOD, allowing more capabilities in terms of advertising.
Benefits of advertising on advanced television
The benefits of CTV advertising include the following:
- Targeting
Advertisers are looking at data-driven target marketing for their ads. This means they’re looking to advertise directly to people within their target market, an audience that is more likely to buy the product or service. Advanced television enables advertisers to pick their audience with a higher probability of gaining qualified leads. Imagine an auto parts dealer advertising to people who are watching content for restoring vintage cars. That product is as good as sold the next time the audience needs new parts. In fact, research shows people can remember 95% of the information they consume via video.
- Unskippable ads
The option of unskippable ads is an argument some executives would want to bring in when faced with advertising budget allocations. But this isn’t an option only available to brands advertising on cable. Unskippable ads on CTV are not the world’s best-kept secret. With CTV, you can get linear advertisements that run in line sequentially with the content being watched. This can be before, during, or after the video is over. Marketing executives need to look beyond the Youtube model and realize that there is more to video.
- High viewability
Like everything else in the world of advertising, ROI depends on the numbers a channel is pushing. You are looking at how many people are actually seeing your adverts. According to MRC guidelines, viewability is measured based on at least 50% of an ad’s area being visible on the screen for at least 1 second. AVOD has high viewability, as the majority of ad formats are full-screen. Others, like banners, are generally placed directly on the screen as a best practice. Placing the advert where one has to scroll to see it is not the industry standard. Advanced television gives advertisers and publishers a greater variety of ad formats to use.
- A positive approach from the viewer
With video, you are looking at content that keeps the people engaged for however long the delivery is. While ad breaks are standard practice in both traditional tv and advanced tv, in the latter, advertisers have an upper hand, since the ads are personalized to the viewers. The audience uses the short break to reflect on their favorite scene, at the same time also receiving content that is relevant to them and improves their overall experience.
Catching up with the trends
The numbers don’t lie. By now, it’s hard to argue with the idea that video outside of social media is drawing in large viewerships. In 2020, AVOD is bigger than cable. And it’s still providing advertisers with high ROI digital real estate. AVOD offers as much exposure as traditional television through its multiple ad formats. This is what businesses are buying into. Viewers are okay with watching ads for free content; hence AVOD has more viewers than paid tv like SVOD. The following ad formats have gained much traction:
- Bumper ads
Bumper ads are quite popular with advertisers. They are non-skippable video ads, up to 6 seconds, that must be watched before a video on a VOD platform can be viewed. This offers a great way to catch the viewer while they are still attentive to what’s going on on the screen.
- Linear video ads
Linear video ads are much like bumper ads, but longer. They can be 15 to 30 seconds long. When the ad plays, it covers the full video player space. The viewer cannot fast-forward or skip this kind of ad. However, note that although they are quite popular with advertisers because of the higher engagement, they also have high stats for viewer abandonment.
- Overlay ads
Overlay ads are banners that only partially cover the screen as the video plays. Typically the area covered is 20% of the video frame. Your overlay ad can be in the form of videos, images, or text to advertise your product. Overlay ads are effective for boosting brand awareness, as they are short and precise.
- Rewarded Video ads
You might already be familiar with the use of rewarded video ads in mobile games. These types of ads are also used in CTV apps. For example, a user can be offered an hour of uninterrupted streaming if they watch a 30-second ad. The ad has increased visibility, and this tactic also helps drive up click-through rates.
If you feel you missed out on the boom when nationwide lockdowns were keeping people glued to their screens, you’ll be happy to know that these video viewing habits may not be going anywhere anytime soon. According to surveys on CTV trends, it’s pretty clear that 85% of people are not planning on canceling their subscriptions to streaming services.
Branded channels
Branded channels are helping businesses make more headway with video-oriented advertising. Instead of relying upon slots on others’ channels, you can choose to open your own channel dedicated to your company or product. For example, branded channels on youtube offer more viewership insights and the ability to customize the channel in the same way a personal youtube account can. You can share videos of product launches, product demos, webisodes, tips, how-tos, behind-the-scenes content, and more. Nintendo, Ubisoft North America, and Mazda USA are just a few of the brands taking this route.
The scope for branded channels also expands to CTV. Today, you can create your own channel on platforms like apple tv, amazon tv,android tv and roku just to name a few. There is so much you can do with custom CTV apps.
Getting started with branded channels and custom CTV apps
Vlogbox can get you what you need to ride the wave in CTV ads. The Video Monetization Platform enables content owners to get more for their content without the limitations of platforms like Youtube. The services offered include hosting, encoding, and streaming of video content along with custom app development. When the Riki Group, a Russian animation company, needed CTV apps, the Vlogbox team made it all possible. They have also helped Watch Jojo expand beyond Youtube to FireTV, iTunes, and Roku with over 16000 app installs.
Companies also use Vlogbox to set up branded channels that provide marketing services in addition to development and maintenance with no upfront costs.
The Takeaway
The CTV market is ripe for advertisers and content creators of all sorts. There is much to be gained from efficient ad monetization and use of the right formats. CTV devices currently span across desktops, smart TVs, and mobile phones; hence the possibilities are endless when it comes to channels and delivery methods. Both distributors and advertisers are going to need to understand the specifics – and benefits of CTV to keep up with the shifting advertising landscape. That way they can capitalize on the opportunities it brings.
