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Business Thought Leadership

Why Advertising-based Video On Demand Should be in Your Future

By Roberto Lago
VP Media, Channel Integration

Once dominated by Netflix and Amazon, subscription services are now losing market share to the new kids on the block offering advertising-based video on demand (AVOD) services. In the pipeline are offerings from premium providers such as Disney+, the Discovery Plus/HBO Max merger and ultimately Netflix’s, which recently backtracked on its no-ads posturing. By 2025, it is estimated that 165MM US viewers will be accessing AVOD content, accounting for 61% of digital video viewers.

This all comes as the market adapts to consumers who have become weary of stacked subscription costs and are increasingly more tolerant of AVOD content in exchange for a reduced-cost or a free service offering. And these changes are being validated via high churn as consumers continue to be hit with incremental, yearly prices increases drawing significant backlash and public outcry.

Which isn’t’ to say consumers ignore these ad placements, as recent research findings have indicated that upwards of 80% of consumers are willing to tolerate ads during TV shows and movies. But it’s not just about any old ad, 60% of consumers who were served relevant ads reported enjoying the experience. And that ad relevancy it tied directly to first-party data-driven insights available via AVOD, that allow brands and marketers to reach qualified audiences to purchase their goods and services.

At CCOM, we work with our client partners to identify strategic AVOD campaign activations that provide benefits by selecting the ideal mixtures of ad-supply inventory. Understanding the unique consumer audiences available on the streaming platform allows us to evaluate and capitalize on the incremental reach, frequency, and messaging impact each new AVOD platform offers.

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