Three monetization models are widespread in the video streaming industry. Many companies opt for an SVOD revenue-generating model since it ensures a steady revenue stream. Charging TV programs is also convenient with subscriptions. The illustration is a platform delivering Albanian IPTV.
Other services prefer to capitalize on OTT advertising.
The AVOD monetization model has drawn attention because many large companies introduce ad-based plans into their pricing options. They now offer two packages to their viewers: one is an ad-free subscription, and the other is an ad-supported subscription. They differ in price.
Let’s explore the ad-based revenue model in detail and what server-side ad insertion has to do with it.
What is AVOD Monetization?
AVOD refers to ad-supported video-on-demand. Generally, AVOD content is free of charge for viewers, but they watch ad commercials during the playback. Running ads is what allows content providers to make income on the video streaming platform.
AVOD platforms are a win-win for all parties involved. Everyone receives what they need: viewers watch an unlimited amount of videos for free, content providers generate revenue by advertising, and advertisers reach out to their target audience via video streaming services.
The targeting functionality simplifies the reaching process and saves resources. Providers show viewers videos that might be interesting to them instead of displaying one ad to all users as it is with traditional television.
Statistics Facts About Ad-based Platforms
- AVOD revenue is projected to reach about $91 billion by 2028.
- The number of AVOD consumers is expected to reach 3,44 billion users by 2027.
- 32% of users signing up for a US SVOD service choose a plan that is supported by ads.
- 3 out of 4 users think of AVOD services as a viable alternative to cable or satellite television.
Benefits of AVOD Monetization
Accurate targeting – instead of showing ad videos to all viewers, people watch those they might be interested in. For example, a 20-year-old girl can have different interests from a 37-year-old man.
Detailed analytics – providers receive in-depth analytics data on the performance of commercials. Detailed information helps measure the success of a campaign and improve.
Optimization – providers can introduce changes to campaigns as soon as they receive the first data.
Understanding Server-Side Ad Insertion
One of the challenges of the ad-supported monetization model is ad blockers. When a user leverages ad blockers, they don’t watch commercials, which means that providers don’t receive their revenue.
SSAI, or server-side ad insertion, is a method of inserting ads into a video. Unlike CSAI (client-side ad insertion), which does all manipulations locally on the client side, SSAI is about stitching an ad and a video together. As a result, ad blockers cannot detect commercials, and you receive your money.
Here’s the list of benefits of SSAI for ad-based VOD platforms:
Bypassing ad blockers – people use ad blockers to prevent commercials from appearing on a website or during a video playback. SSAI helps providers to avoid ad blockers.
Increased device reach – server-side ad insertion allows providers to reach even devices like set-top boxes and game consoles.
Revenue growth – since SSAI helps you bypass ad blockers and reach more devices, more people potentially watch ads, and you receive your revenue.
Improved user experience – SSAI helps eliminate undesired buffering.
AVOD monetization is one of the widespread revenue-generating models in the video streaming industry. It helps attract viewers and make money by advertising. However, one of the main problems AVOD providers can face is ad blockers. SSAI is the solution since the technology stitches a video and a commercial so that they are inseparable. It helps you save revenue.