Global Ad Trends: AVOD Spend To Double In Next Five Years

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Advertiser-funded video on demand (AVOD) is outpacing other paid media with spend set to double to $47bn by 2023 worldwide, according to WARC’s latest Global Ad Trends report, out today.

More broadly, both consumer and advertiser investment in over-the-top (OTT) platforms is rising: globally, spend is projected to reach $129.3bn in the next five years.

As a medium, AVOD is still young, though notable examples of Hulu, HBO Now, and Sony’s Crackle, as well as reported interest from Amazon, hint at its future power.

Compared to other paid media in WARC’s International Ad Forecast, AVOD is growing faster. The expected $23.8bn in brand investment that AVOD will receive this year equates to a 5.2% share of global adspend, but spend has increased year-on-year. As a percentage of total OTT spend (estimated by Digital TV Research at $68.7bn this year – up 29% from 2017), AVOD will account for 34.7%.

“Consumers’ voracious appetite for video content anywhere, on any device, has been propelled by SVOD services such as Netflix. But it is AVOD platforms which present the opportunity for advertisers to marry rich consumer data with pinpoint targeting during engaging content,” says James McDonald, Data Editor, WARC.

“This is why AT&T and Amazon are exploring moves into the AVOD sector next year, with the ultimate aim of taking the lion’s share of a market expected to be worth $47bn by 2023.”

At the strategic level, consumers’ appetite for cross-device streaming is creating an impact. A full 81% of consumers now say it is important that they can watch TV programmes whenever they want.

The wide array of publisher specs, insufficient lead time required to track down all creative assets and a lack of standardised measurement when buying cross-channel audience-based inventory are cited as major concerns by practitioners.

As a result, OTT is not currently front of mind when building media strategies; just a quarter (26%) of US CMOs regard OTT as either very or extremely important to their plans. This despite evicence showing integrated campaigns are 31% more effective at brand building.

Credit: WARC

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