On its International Advertising Forecast, the World Advertising Research Center (WARC) recorded that the expansion of advertiser-funded video-on-demand (AVoD) industry has been more rapid, compared to other paid media services.
By 2023, the spending on AVoD is forecasted to be twofold to $47 billion internationally. This is among the findings in the Global Ad Trends report released by WARC today.
The study indicated that both advertiser and consumer investments in over-the-top (OTT) platforms are rapidly surging.
In the next five years, the spending on OTT is foreseen to enter the $129.3 billion neighborhood.
AVoD also pertains to advertising-based video-on-demand. It is free of charge to consumers and customarily used by traditional TV channels.
But just like TV, audiences will have to view advertisements with the service. Examples are 4OD and YouTube in which advertising revenues are employed in offsetting hosting and production expenditures.
Premium content owners barely use AVoD. This is because it generates fewer revenues than TV on-demand (TVoD) and subscription video-on-demand (SVoD).
Moreover, AVoD is still a new medium. However, hints of great potentials have been exuded by HBO Now, Hulu, and Crackle, Sony Pictures Entertainment’s advertisement-supported video entertainment content.
Reported interest from retail giant, Amazon, also makes AVoD a promising industry. James McDonald, WARC’s Data Editor, cited that SVoD services like Netflix have driven the “voracious appetite” of consumers for video content using any preferred devices, anytime and anywhere.
He said, however, that it is the AVoD platforms that are showing the opportunity for advertisers to combine sufficient consumer information with “pinpoint targeting during engaging content.”
McDonald furthered that this is the ground as to why Amazon and AT&T, the world’s largest telecommunications service provider, will engage in AVoD exploration next year.
Their primary objective is to gain the AVoD market’s lion’s share which is projected to be worth $47 billion in the year 2023.
The anticipated $23.8 billion in brand investment that the AVoD medium will get this year is equivalent to a 5.2 percent chunk of global advertising spending.
This spending has been climbing year-on-year. 34.7 percent will represent AVoD in the percentage of total OTT disbursement.
Digital TV Research made an estimate of $68.7 billion this year, a 29 percent increment from last year.
Founded in 1985, WARC is an online research firm providing data about the best practices in advertising, insights, and evidence from major global brands.
It helps its customers expand their businesses through effective strategies, maximizing advertising success.
With offices in the United Kingdom, the United States, and Singapore, among the clients of WARC are huge international media and advertising companies, think-tanks, marketers, and universities.
These include Facebook, Procter & Gamble, Cathay Pacific, Yahoo!, Harvard Business School, Eurosport International, and ESPN.