AVOD vs SVOD vs MVPD vs OTT? Regardless of your role in advertising, it is always advantageous to keep up with the latest trends and development in the industry. With the pace of evolution in the current landscape, that is a lot easier said than done. Our team made it simple and put together a comprehensive guide on everything there is to know about video on-demand for advertisers.
There are a lot of acronyms thrown around in digital advertising, especially as trends change or evolve. The simplest way to understand how all the various terms are connected is to think of it as a hierarchy, with OTT being the overarching medium that encompasses everything else.
>> Read our full post on the difference between SVOD, AVOD, OTT, and CTV here.
With the industry in a state of constant change, it is important to have a solid understanding of best practices to be able to deliver results. Beyond the typical performance metrics, having a strategic approach also means managing concerns like ad fraud, brand security, vendor credibility, and more.
In traditional marketing, the rule of thumb is to cast a wider net and maximize the number of impressions. This was the best way to optimize reach to individuals that fit within the target audience demographic. With modern digital advertising, the advanced audience targeting ability means that lower reach is not necessarily a bad thing, since the quality of impressions is better.
At the end of the day, the goal of every advertising campaign is to drive results. In our realm, this means conversions. One of the early critiques of advertising via OTT/CTV is that ads are not “clickable” and therefore not actionable. However, there are ways to simulate action with sophisticated retargeting tools such as the Encore Omnichannel, which allows advertisers to immediately retarget viewers with relevant calls to action on other devices like mobile phones, laptops, tablets, and more.
When we discuss conversions, we often only think about click-through rates. This isn’t always the right way to look at the success of a campaign, since AVOD ads aren’t technically actionable to begin with. Following this logic, being able to attribute engagement and actions is a far more impactful metric to measure. Advertisers should be able to answer the question: Who saw your ad, and what did they do after?
The Strategus Attribution Suite addresses this issue with customizable components for both online and offline attributions, including after-ad influence, offline conversion tracking, and post-view attribution.
>> Read our full post on the strategic approach to AVOD advertising here.
As humans, we are naturally drawn to things that are new and fresh. This is also true when it comes to ad creative. People will grow tired of seeing the same content and disengage with ads that are not interesting, exciting, or new.
Creative fatigue is what happens when the same “creative” content is shown repeatedly and causes consumers to disengage. For example, your audience may find a specific brand’s ads and ad styling to be too familiar, and therefore predictable or boring. This is a problem because it can trigger any or all of the following:
Ad creative fatigue will always play a role, small or large, so it cannot be eliminated fully. It can be mitigated, however, by following any or all of the following tips:
>> Read our full post on minimizing ad creative fatigue here.
As the new normal brought about by the COVID-19 pandemic shifts consumer behavior, there has been a rising trend with viewers opting in to AVOD/FAST services. This pivot is actually a return to the old ad model, which is great news for marketers. We see this in three distinct areas:
Year-over-year ad revenue shot up 31% in 2020 for five of the major ad-supported streaming platforms (Roku, Hulu, Peacock, Pluto TV, and Tubi). This is a result of the following:
When we think of AVOD advertising, the best approach is to think of it in the context of OTT/CTV advertising as a way to drive leads. This allows advertisers to focus on some core advantages that should be leveraged for any AVOD campaign:
The amount of data that is accessible to advertisers with AVOD or OTT services is nothing short of remarkable. Having the sheer amount of data lends marketers the unique ability to hyper-target individuals in any of the following ways:
>> Read our full post about AVOD opportunities for advertisers here.
When it comes to OTT video, the platforms that have dominated in recent years have all been premium subscription based (SVOD). With the COVID-19 pandemic, a new shift is happening as consumers are switching to ad-supported platforms (AVOD) to save money, as AVOD services are often free or offered at a lower price.
The major selling point for SVOD services has been an ad-free viewing experience with premium content, original content, and/or exclusive content. This means that content is king and necessary for the SVOD business model to work.
When it comes to the OTT space, AVOD is a relatively newer business model. But unlike traditional TV ads, there are a couple key differences:
We have already accepted that OTT will be the future of media, and it will not come as a surprise when it eventually overtakes traditional TV. But OTT is large and all encompassing, and there are several sectors within its ecosystem. Given the mass adoption in the short period of time since its arrival, we can anticipate AVOD playing a huge role in the near future.
>> Read our full post about SVOD vs AVOD here.
As advertisers, staying on top of all the industry trends takes a lot of time and investment. As we continue to shift away from traditional TV into digital streaming, we’re looking at how viewers are leaving MVPD, or multichannel video programming distributors. MVPDs reference services that offer various TV channels leveraging some type of physical infrastructure, e.g. DirecTV or DISH.
Virtual MVPD was the sector of OTT introduced a few years ago as a response to the cord-cutting movement. Major networks assumed that people highly valued live programming and simply wanted a more cost-efficient alternative. That does not appear to be the case as new data shows individuals abandoning their vMVPD subscriptions.
AVOD, in contrast to vMVPDs are seeing heavy growth despite the pandemic, or perhaps because of it. Ad revenues for the sector are expected to grow 25 percent in 2020. Under the new normal, we can expect this trend to hold steady as individuals continue to have higher media consumption and a desire to cut costs with subscriptions.
>> Read our full post about MVPD, AVOD, and the future of advertising here.
The trajectory of CTV/OTT growth in recent years has been incredible. As it has evolved, it has created a number of sub sectors, including AVOD, SVOD, and MVPD.
The last two words of the acronym are a good way to think of this sector: programming distributor. MVPD is used to reference services that offer “live” programming, or simply put, television channels.
SVOD services are premium subscription-based with a membership or monthly commitment and offer ad-free viewing experiences. The most popular SVOD service is most likely Netflix, but other examples include, Disney+, AppleTV+, and the ad-free premium version of Hulu.
AVOD streaming services are, like its name suggests, advertising-based. They are typically free for viewers without any type of subscription and the business model is supported through ad revenue. Some AVOD services are a low-priced package from popular platforms like the $5.99 version of Hulu, which supports ads.
>> Read our full post about AVOD services here.
OTT video is far reaching and still changing rapidly. Strategus is thrilled to be a pioneer in the space and at the forefront of this still development industry. Contact us to hear more about our thoughts or consult our experts on your next VOD campaign.