27 January 2023 09:38


Pluto TV and the AVOD Opportunity for Advertisers

Trends in consumer behavior hints at a bright future for free-streaming television.

The new era of free-streaming TV is here and it may be the answer to growing consumer subscription fatigue. According to the World Advertising Research Center, growth in ad spend on ad-based video-on-demand (AVOD) services is outpacing dollars spent on other media, and it’s projected to be worth $47 billion of the OTT market by 2023 — almost double its 2018 value.

On-demand, subscription-based (SVOD) services have dominated the video streaming market these past few years, in terms of users and hype. But, with the decline of pay TV and the rise of OTT content, free alternatives to subscription services provide a change of pace for consumers paying multiple monthly fees for a stack of SVOD services. This means advertisers and publishers will have new opportunities for increased reach and revenue.

Viacom joined the burgeoning field of AVOD with its recent acquisition of Pluto TV for $340 million. The platform offers 100+ channels spanning entertainment, sports, news, lifestyle, comedy, cartoons, gaming and trending digital series, as well as thousands of on-demand movies and TV shows.

It also boasts more than 15 million monthly active users, more than half of whom are on connected TVs that allow for high-quality addressable advertising impressions for Viacom’s Advanced Marketing Solutions division. And, with the largest AVOD audience segment being 18- to 34-year-old adults, there’s greater opportunity to directly reach Viacom’s core audience.

For more context, here’s what the data indicates about the opportunity of AVOD:

Consumers love streaming content and prefer to watch on TV screens.

The majority of adults prefer to watch content on a TV. To be exact: 53% of adults age 18 to 24, 68% of adults age 25 to 34, and 77% of adults age 35 to 44. (Viacom Global Consumer Insights)

The number of TV viewing hours devoted to streaming has grown more than 2X since 2015. (VAB)

Consumers age 13 to 34 spend twice the time streaming when watching on connected TV devices compared with watching on the computer or mobile devices. (Nielsen)

This has led to an explosion in the use of OTT devices and connected TVs, which is expected to grow even more in the years ahead.

80% of U.S. households were reachable through OTT by the end of 2018. (Magna)

Americans spend nearly 8 billion hours per month using connected TV devices, including smart TVs, Roku, Apple TV, and Amazon Fire TV. (Nielsen)

As of 2018, the majority of Americans are connected TV users. The user base is expected to grow by another 22 million people by 2022. (eMarketer)

Connected TV users are the fastest-growing segment of Pluto TV’s user base—growing 70% in 2018. They now make up more than half of Pluto TV’s active users. (Viacom Newsroom)

This is all a boon for advertisers since ad-supported streaming video complements traditional TV ad spending. Over-the-top (OTT) platforms offer advertisers digital-quality attribution and analytics, while traditional TV provides reach and scale.

70% of households with OTT capabilities also have a cable subscription. (VAB)

Ad spending on over-the-top (OTT) TV is estimated to have increased by 54% from 2017 to 2018 to reach $2.7 billion and is projected to increase by another 40% to $4 billion in 2019. (Magna)

Plus, AVOD is a new way to reach television viewers who don’t subscribe to cable and/or are fans of streaming OTT content.

76% of Pluto TV users are not using traditional cable/satellite TV; 85% are not on other skinny bundles. (Pluto TV Survey Q4 ‘17)

74% of Pluto TV users also use Netflix. (Pluto TV Survey Q4 ‘17)

And, AVOD offers advertisers access to desirable audiences with the most effective and impactful format.

A third of AVOD viewers have a household income of $75k+, (IAB, Oct 2018) and the majority of Pluto TV’s audience is under age 35. (Pluto TV User Exploration, Viacom, 2019)

Teens and adults trust advertising on TV more than they do on other platforms. 56% of teens and adults say TV commercials are more impactful than social media ads for discovering new products or brands.(Viacom, Power of TV study)

Television is at least 3X more effective at influencing purchase decisions than any other medium, including social media, search, and digital ads. And, 81% of adults 18+ are reachable by television—the highest reach among all ad-supported platforms. (GfK TVB)

AVOD users also say that Pluto TV ads are better—more enjoyable, memorable, and relevant—than ads on other AVOD platforms or Hulu with ads. Pluto TV User Exploration, Viacom, 2019)

Read 653 times Last modified on Saturday, 11 April 2020 03:32
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