advertising video on demand: why it's the future of TV

Advertising Video-on-Demand (AVOD): Why It’s the Future of TV

In recent years, subscription video-on-demand (SVOD) services have been the go-to model for most streaming platforms. TV consumption changed dramatically, with streaming services such as Hulu and Netflix becoming household names.

According to Statista’s estimates, SVOD subscriptions can reach 1.7 billion by 2027. But this doesn’t mean new ad-supported platforms and services don’t have a place in the streaming race. In fact, it can be the future of television. Netflix, the biggest streaming platform globally, joining forces with Microsoft to offer an advertising-based subscription plan can spell a huge difference.

What is Advertising Video-on-Demand and Why Choose It?

Advertising video-on-demand (AVOD) is a streaming service that uses ads to earn revenue. Brands can take advantage of the service to reach more people who watch shows without paying monthly subscription fees. Hulu was one of the major AVOD companies before it shifted its services to SVOD.

study shows that AVOD streamers are expected to earn $260 billion over the next three years, way more than the projected earnings of SVOD of $174 billion.

Consumers still subscribe to streaming services. However, the current trend shows that subscription growth doesn’t align with the number of consumers. This means a continuous decline in subscriber numbers and a possible negative churn rate. Shifting to an AVOD model may be the solution.

Putting Context in Advertising

To experience the value of AVOD, brands need to look beyond the growth and size of their audience. They must pay close attention to engaging the consumers. The goal is to increase the time spent on streaming.

How do you make this happen?

You have to put context in your advertising efforts. Most AVOD platforms assume attracting consumers is all about content. However, most ad-supported contents are irrelevant and inappropriate. This leads to a negative ad experience.

Nowadays, it’s common to hear consumers voice out their dismay about duplicated and bloated content. With more streaming options to choose from, it won’t be hard for the audience to jump the fence.

Marriage of Advertising and User Experience

Remember, AVOD is all about engaging your audience. This means investing in advertising experience and ensuring it gels with the overall user experience.

AVOD providers must focus on relevance. This is possible by employing the best practices for ad targetingprogrammatic ad activation, and measurement.

Relevance should be at the granular level to ensure the audience actually gets value from the content they’re consuming. Serving ad frequency should undergo A/B testing to see if the content isn’t overly duplicated.

Winning Back Lost Audiences with AVOD

Consumers have changing preferences and understand that consuming free content in exchange for their attention is a deal they’ve entered into when using ad-supported platforms. However, it remains the advertiser’s responsibility to ensure their target audience will not rethink the bargain they’ve signed up for.

AVOD is also critical in recapturing lost audiences because of the engagement options brands can employ in their advertising strategies.

The Future of AVOD

The concept of AVOD may still be new. But it has a promising future. With viewers demanding quality over their content experience, it’s about nailing the best practices. Platforms must invest in solidifying their content stack.

Need help with your advertising campaigns? Contact us now, and we’ll help you optimize your ad content.



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Pranav Kataria

Associate Director, Programmatic Strategy

As the Associate Director of Programmatic Strategy, Pranav brings over 8 years of experience in the adtech industry working with Publishers, DSPs, Agencies, and Advertisers from global regions to improve their monetization, performance, and strategies. With great understanding of the mobile market, his expertise lies in analytics, account management, strategy, and ad sales. With this refined skill set, he brings customer-centric mindfulness that enables growth and innovation.

Before joining AlgoriX, his keen business perspective and skills have earned him opportunities to work across different organizations and verticals in the advertising ecosystem; be it improving the processes, sales enablement, and managing client relationships.

Ray Xia

VP, AlgoriX Partner Studio

Ray Xia was a mainstay at Tencent Games, having worked at the company for 13 years. There, he took on various roles including backend developer, application development manager, and game producer. During this time, he actively participated in the development and operation of popular titles such as QQ Pet, QQ Pet Fight, and games involving the Naruto franchise. To date, these games have over 10 million daily active users. Through this rich well of experience he has accumulated covering all aspects of game development and operation, he aims to spearhead more creative endeavors via AlgoriX Studios.

Naomi Li

VP, Research and Development

Naomi Li has a decade’s worth of experience in research and development for the adtech industry. She started her career at Baidu where she was mainly responsible for the Automation Testing of the Baidu Fengchao Ad Search Engine. There, she focused on the fields of overlapping experiment infrastructure, rich media ads rendering, and ad antispam technology. Moreover, as part of Baidu’s International Group, she led the research and development of various monetization and advertising mechanisms for Baidu’s overseas app store, SDK, and AdNetwork. At present, she is responsible for the overall direction of AlgoriX’s R&D efforts, which include product planning, technical architecture design, and talent training.

Frederic Liow

SVP, Revenue Growth & Strategy

A veteran in the digital advertising industry, he began his career during the early days of the dotcom era. To date, his passion for the digital industry is still as strong as ever (and getting even stronger). Spanning twenty years of his digital career, he has worked for leading companies like Nielsen, MRM McCann, Omnicom Media Group, Millward Brown and Smaato. Currently, Frederic is the revenue officer for AlgoriX spearheading global revenue growth, business expansion and strategic partnerships. He has set up and built AlgoriX’s global mobile ad exchange, hiring talents, establishing best practices, and injecting global industry standards into the company. Prior to his current role, he was the Head of Demand for Smaato, overseeing the demand business and operations in APAC. Frederic is currently based in our Singapore HQ.

Xinxiao Guo

Chief Operation Officer

Equipped with a decade’s worth of experience in global product operation as well as a deep understanding of emerging markets, Xinxiao brings her expertise in mobile traffic monetization and programmatic advertising to the table. Before her role at AlgoriX, she was a core member of iQIYI’s research and development unit. After that, she moved to Baidu as Head of Programmatic Advertising.

At present, she is AlgoriX’s co-founder and Chief Operation Officer. Together with the team, she aims to help game developers effectively reach global audiences and implement better monetization strategies.

Ruiz Xie

Chief Executive Officer

With nearly 20 years of business experience, Ruiz Xie founded AlgoriX with the vision of creating a global advertising platform and entertainment ecosystem. Through AlgoriX’s services, he aims to create a more inclusive tech ecosystem by providing customized solutions that meet the needs of businesses at every stage. At the same time, through AlgoriX Studios and its third-party partner studios, the company is currently bringing to life a greater goal of providing a comprehensive entertainment platform for people worldwide, which covers games, IP, comics, movies, and more. At present, he leads nearly a hundred employees with concrete plans to expand the company by establishing more offices worldwide.

Before founding AlgoriX, Ruiz Xie joined CoreMail in 2002. There, he created the first Ajax version of the mailbox in China for NetEase, which was the largest Internet company in China at the time. After that, he joined Tencent in 2005 and contributed to the creation of Tencent Games while also building a large scale distributed storage system. In 2013, he moved to Baidu where he took part in developing Baidu International’s overall architecture and search advertising system. During his tenure, he was also the Chairman of the Baidu Global Technical Committee and Baidu’s chief architect.