Why AVOD Is the Right Video Monetization Strategy

Video monetization is a great opportunity for publishers with OTT services, large video libraries, or just video content, in general, to earn from video. Among the available monetization models, AVOD (advertising video-on-demand) stands out as it offers a way for publishers to provide free content to their users and at the same time generate revenue. So, let me point out some key benefits of video advertising that might convince you to opt for this monetization model.

AVOD — A Win-Win for Users and Publishers

Unlike SVOD, which requires users to pay a subscription fee, and TVOD, which operates on a pay-per-view basis, AVOD is an ad-based video monetization model that allows online users to access content in exchange for viewing ads. This model creates beneficial outcomes for both sides: publishers earn revenue by putting ads in their videos, while online users get to enjoy free access to content.

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AVOD on the Rise 

The AVOD market size has significantly expanded in recent years. More and more publishers, among them even household names, are switching it up and finding success with AVOD. For instance, IMDb TV tripled its active user base in two years, leading to its complete rebranding as Amazon Freevee and new in-house productions. 

Additionally, Fox’s free ad-supported streaming service Tubi reached 80 million monthly active users as of March this year, becoming a strong competitor for SVOD platforms such as Netflix, which has seen a decline in subscriptions over the past few years.

Pros of AVOD for Publishers

Not taking advantage of the current global ad spend means leaving valuable revenue on the table for website and video publishers. But beyond that, AVOD stands out from other monetization models by offering unique benefits. This makes it the go-to option for many publishers. 

Easy to Implement 

To get started with AVOD, all you need is some general knowledge of ad ops and a quality video ad network. Ad networks mediate the ad distribution process between publishers and advertisers by matching advertisers who want to serve ads with publishers who have available ad space on their websites, mobile apps, or other digital platforms. 

They usually provide additional services such as targeting, ad delivery, and performance tracking. The entire AVOD implementation process is quite simple, unlike SVOD and TVOD, where you have to integrate different payment models and employ a paywall and payment security.

Great for Beginner Publishers 

Chances are, users won’t be willing to pay subscription fees to unheard-of publishers or publishers just starting with OTT services. So for beginner publishers with a small or no established audience, I recommend AVOD. It is a great way to attract new users as you’ll be offering free content for just viewing an ad or two.

Higher Viewership  

SVOD and TVOD monetization models limit the publisher’s audience reach. Many online users nowadays prefer ad-supported free video content rather than pay-to-view content. In fact, according to IAB, the majority of users don’t mind watching instream video ads in exchange for free access. The latest IAB Privacy Report also states that 80% of users believe that open and free ad-supported content is the best option for Internet democracy.

Ad Position Flexibility

Publishers can select any type of video ads (e.g., pre-roll, mid-roll, post-roll, overlay, etc.) they want to serve and control when and how they appear. This flexibility allows publishers to test different video ad formats and focus on those that perform the best. By regularly optimizing your strategy, you can maximize revenue while minimizing disruption for your users.

Revenue Optimizing and Boosting  

The biggest advantage of AVOD is the amount of potential revenue publishers can generate from selling ad inventory. This can be done by setting different prices for different ad formats and placements (with a focus on the ones in demand). However, price floor optimization can be a challenging thing to do on your own. You’ll have to find or create a professional ad ops team. To save money and time, I suggest finding a quality solution instead, such as TargetVideo’s Yield Optimization Engine. 

As a part of Yield Optimization Engine, we offer the Automated Price Floor Optimizer that uses machine learning and large data models to set and continuously adjust price floors for Prebid. YOE makes sure that every one of your ad slots is sold at the best possible price. 

Works Well With Other Monetization Models

Publishers don’t have to be limited to one monetization model. By combining AVOD with other monetization models, publishers gain multiple revenue streams. I suggest monetizing free content with ads but having an optional subscription fee that allows users to enjoy your videos ad-free, or creating an optional paywall for users who want to access more exclusive video content. 

AVOD Made Easy with Managed Video Player

TargetVideo’s Managed Video Player is the ideal solution for publishers lacking the resources for full ad ops and video production teams or those looking to simplify their workflow. With our Managed Video Player, publishers get low-latency content and ad delivery, an in-house video library, access to premium quality ad demand, advanced ad tech, AI tools, and full player customization. Don’t get overwhelmed by the number of features we offer, our dedicated publisher success managers will take care of everything in your place!

End-to-end solution for publisher monetization, video content, and audience engagement. You embed the player – we do the rest!

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