The Future is AVOD – Pt 3 & 4: Why AVOD is Hard and How Unreel Has Solved it

In part one and two of our blog series, “The Future is AVOD”, we established that advertisers are hot on OTT and that an AVOD model can grow and support industry-leading streaming services at scale.  With an expected 225% growth in OTT ad spend predicted over the next 3 years, the market is inarguably on a torrid trajectory. However, with money increasingly pouring in, there is unexpected friction for streaming services looking to implement ads.  There is no shortage of OTT ad calls and there is an abundance of marketing campaigns seeking OTT inventory – yet fill rates for most streaming services on OTT are dismally low. Clearly, there is a disconnect.

 

Improving fill rate is a challenge for most streaming services because it is unappealing for advertisers to actually buy their inventory.  This is in large part due to shortcomings by the streaming services themselves to provide detailed user-data and sizable enough ad inventories to attract advertisers.  To explain why the growing total ad spend on OTT is not being evenly distributed we have to understand how advertisers make decisions.

 

Marketers are seeking the most efficient and effective opportunity available to deploy their budget.  Managing relationships and campaigns across multiple streaming services who are unable to guarantee the necessary volume of ad calls is more nightmare than solution for advertisers. It is considerably easier for them to partner with fewer, larger streaming services capable of reliably delivering a volume of ad calls sufficient to expend their budget.  Even with marketplaces that mitigate the complications of running ads across a larger number of streaming services, it is still an undesirable proposition for advertisers who have better options.

 

The second issue is collecting user data, or lack thereof.   The price to develop or license sufficient demographic gathering tools is too steep for a majority of streaming services. The alternative option – requiring that users provide the data themselves during the sign-up process  — is both ineffective and a hassle; at best annoying impressionable new users and at worst driving them away. Advertisers looking to maximize their return on investment know the value of paying higher CPM’s to reach their exact target demographics.  That level of desired targeting can only be served up by streaming services with advanced user data collection in place.

 

Even with adequate data and sizable inventory, ads are not promised to follow. Without resources for a dedicated ad sales team to directly sell inventory to brands, all but the most established and well-backed streaming services are struggling to find consistent ad fill at fair value. Lacking a sales team to pitch on their behalf, streaming services most often rely on ad marketplaces. For web and mobile display ads, which have a more established track record, these marketplaces have a constant flow of buyers and sellers matching up without obstacles.  Everyone involved knows what to expect. Conversely, with OTT everything is still new. The infrastructure is in place for these marketplaces, but the ROI for advertisers can be uncertain. This causes inconsistent fill as advertisers come-and-go, testing several marketplaces and partners. Some months fill rate may be up, others that rate comes crashing down.

 

Part 4: Solutions engineered by Unreel

At Unreel, we specialize in AVOD on OTT. Today we power the tech and monetization for over 150 AVOD streaming services across multiple platforms. Between our partner’s apps and our own owned-and-operated streaming services, we make an extremely high number of ad calls a month.  We have solved the pitfalls of the current OTT AVOD landscape, creating a solution that allows the streaming services we work with to deliver optimized ads from day one.

 

AVOD streaming services that are powered by Unreel have instant optimized inventory at scale.

 

The ad inventory of all the streaming service we work with is aggregated and can be sold in bulk.  This means that regardless of any single streaming service’s size, their inventory can be part of the massive volume offered by Unreel’s entire network.  That volume is more than enough to meet the threshold advertisers are looking for before making major buys.

 

Having the ability to combine inventory is a huge advantage, allowing us to operate as a single major player in the OTT space on behalf of the many streaming services we touch. However, inventory volume means nothing if you can’t find advertisers to buy it. Even for our large partners, who have sufficient inventory on their own, we are able to help them sell and fill more effectively. This is in large part thanks to years of integrations and partnerships we’ve developed across many of the top ad marketplaces in the OTT space.  Unreel works with our own dedicated ad-ops team that constantly manages fill and CPM bids for each of our streaming services. We are able to work each marketplace and find the right advertisers across multiple exchanges to buy out inventory. From partner streaming services who are just starting out to those with millions of their own ad calls a month, we’ve been able to significantly improve fill and eCPM.

 

In addition to our ad ops team working to enhance ad performance, Unreel’s business development team is also constantly working on selling direct ad buys to companies looking to target very specific audiences on OTT.  Our biz dev team brings on ad campaigns for Unreel and partners with top national brands ranging from auto manufacturers to tech brands. When a direct campaign is sold, we are able to spread the buy across any of the Unreel powered streaming services with the required audience demographics.

 

The reality of OTT in its current state is that even the best ad sales team in the world will likely not find 100% fill.  That means that unanswered ad calls go wasted, providing little to no value to the streaming service. We have engineered a way to extract value from unfilled ad calls that can serve as a major driver of growth for streaming services.  Unreel partners can choose to trade their unfilled inventory with one another; placing promotional ads for their apps. This way streaming services that do not directly compete but have similar audiences can market to one another’s users, increasing the total audience for all involved.

 

The last component of the Unreel ad solution is strategic implementation expertise.  As ad fill increases for streaming services, it becomes increasingly important to optimize the ad experience for users.  Too many interruptions and excessively long ad breaks can drive away users. Conversely, too few ad calls made infrequently can leave money on the table.  Through testing and experience, we’ve determined ad cadences for different formats of content that keep audiences around and maximize ad revenue. We work directly with our partners to ensure their ad strategy is reflective of the best practices we know work on OTT.

 

With a fully fleshed out ad stack and solution for AVOD streaming services, our partners are in a prime position to stake out major claims of the ever-growing OTT pie.  Want your own slice? Let’s talk about your streaming service and what Unreel can do for you.

 

Contact weare@unreel.me to learn more.

 

This is the third installment of a multi-part blog series “The Future is AVOD” where we explore:

 

Part 1: Why advertisers love OTT.
Part 2: Can streaming services scale on ads alone?
Part 3 & 4: Why AVOD is Hard and How Unreel Has Solved it

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