Video On Demand (VOD) is a specific way of video content distribution without a schedule and a traditional playback device. Since the 1960s and up until recently, television broadcast was the most common way of distributing video content. However, the dominance of linear TV was meant to come to its end. With the emergence of the internet, streaming services, and the general evolution of digital technologies, media companies started to discover newer ways of delivering videos. On the other hand, consumers were tired of being limited by restrictions of TV broadcasts and physical mediums like DVDs. Eventually, this culminated in the rise of VOD on Connected-TV, mobile, and desktop platforms.
So what is a video-on-demand service, exactly? Basically, this technology allows users to access content by either purchasing and downloading it from distribution platforms like Amazon Prime Video or subscribing to video streaming services like Netflix, Disney+, and Hulu. Each of these services offers 24/7 unlimited access to any specific show or movie available in their inventory.
Not willing to pay? Fair enough! There are also video-on-demand streaming services like YouTube that provide content for free in exchange for watching commercials. Such an approach attracts a wide viewer audience, as evidenced by the statistics. Today, over 65% of the US population regularly watch at least one of the VOD channels, according to Nielsen report.
Obviously, viewing habits is not the only thing changed by VOD. Advertisers also benefit from programmatic targetable ads and expand their marketing activities to new platforms. In modern reality, an ‘advertising-as-usual’ approach is no longer regarded effective, however, the VOD field is open for new players that are eager to grow.
Types of VOD
There are multiple types of video-on-demand that have different monetization methods and ad environment. Let’s take a look at the most popular options:
Transactional video-on-demand implies the purchasing of each piece of video content at a specified price. For instance, you decided to review the good-old Top Gun movie. TVOD platform will allow you to purchase the movie for, say, $3.99 and keep it in your library forever. TVOD is divided into two categories: electronic sell-through (EST) and download to rent (DTR). The first one allows downloading through the internet and saving it on a hard drive (or a personal account), while the latter grants time-limited access to a video, i.e. renting. Typical illustrations of TVOD services are iTunes and Google Play stores.
SVOD ( PVOD)
Subscription-video-on-demand (also known as Premium VOD) charges its customers with fixed monthly payments and provides full access to the library. Some services like YouTube Premium allow access to exclusive videos upon subscription and other benefits like ad-free experience. Among the popular SVOD platforms, we can find Netflix, HULU, Amazon Prime Video, Apple TV+, HBO Max, etc.
Advertising video-on-demand (also known is ad-supported VOD) platforms use the ad-revenue business model, meaning they monetize their content by placing ads on their videos and/or interface. AVOD services are usually free and have an optional subscription-based ‘premium’ option that disables third-party ads or provides extra benefits such as 4K-quality. Among AVOD services the most popular are YouTube, Sony Crackle, Tubi Pluto TV, and others.
Broadcaster video-on-demand is also known as Catch-up TV. It allows watching TV programs either live through the internet stream or offers an opportunity to watch archived shows and movies that recently were on air. BVOD services are usually run by TV-channels themselves. Among the popular ones are Sky, Channel4, and other major TV-broadcasting companies.
How to utilize VOD campaigns
Having a wide range of formats and functionalities to choose from, VOD advertising might seem a little complex. But in reality, it’s quite the opposite. Channel owners have a comprehensive supply of instructions and specifications for advertisers. Plus, providing assets to a VOD broadcaster has many similarities with the traditional TV ad placing when it comes to format selection. But, setting up impression trackers and right targeting is what complicates the task.
To facilitate ad-placing, ad-configuration, and effectiveness measurements, advertisers can always be assisted by a mediator company like Allroll. If not, the build and ad supply process can be negotiated directly with a broadcaster. Even though VOD advertising is not rocket science, it might be challenging for beginners at times. It’s important to set everything correctly right from the start to avoid unnecessary spending, campaign delays, or other complications. It is also important to select the right KPIs to measure campaign effectiveness with caution and separately evaluate each new campaign. Different VOD-ad effectiveness metrics are better suited for different tasks. For instance, if you expect a rise in public awareness, the only metric you’d need is the completion rate. The next step would be considering the type of video ad, deciding on the message, distribution platform, and target audience.
To sum up
Modern video-on-demand services provide vast advertising opportunities with an ever-increasing audience. But most importantly, VOD services still remain untapped in comparison to the oversaturated TV ad market. Contact the Allroll team right now to get all the information you need to start a successful VOD campaign!