Why SVOD Services Need to Embrace Streaming Advertising Analytics
Enhancing streaming advertising analytics and insights has become a popular topic in the streaming industry due to its potential to revolutionize how Subscription Video-on-Demand (SVOD) services operate.
In April 2023, MediaRadar, an advertising intelligence company, and PlayOn, a streaming video recording platform, announced a partnership to empower the SVOD service with valuable insights, optimize its advertising strategies, and maximize revenue. This partnership is just one of several recent cases signifying an essential step streaming platforms are taking toward leveraging data and enhancing their advertising analytics.
As the streaming landscape becomes increasingly competitive, SVOD services must embrace streaming advertising analytics to gain a competitive edge, deliver more targeted ads, and enhance the overall viewer experience.
Emergence of Hybrid SVOD-AVOD Tiers
In 2022, we witnessed a significant shift in the streaming landscape as both Netflix and Disney+ ventured into ad-supported streaming, introducing hybrid Subscription Video-on-Demand with Advertising (SVOD-AVOD) tiers. This strategic move allowed viewers to access video content at a reduced cost in exchange for watching advertisements. As a result, global SVOD memberships are projected to experience a substantial surge, reaching 1.76 billion by 2028.
This growth will be propelled predominantly by the emergence of hybrid SVOD-AVOD tiers, not only from Netflix and Disney but also from industry giants such as Warner Bros., Discovery, and Paramount. By incorporating ad-supported options, SVOD services can tap into a wider audience base, offering more affordable alternatives while still delivering compelling content. This trend proves the increasing significance of hybrid models and the role of advertising in driving the expansion of the SVOD industry.
What Is Essential in the Streaming Ad Analytics Implementation
To ensure success, implementing streaming ad analytics requires careful consideration of various essential aspects.
First, streaming providers must recognize that advertising is an additional revenue source and a means to sustain growth. However, this transition requires significant operational restructuring, content reformatting to identify natural breaks for ads, cultural changes within the organization, and the incorporation of new sales capabilities.
Some crucial factors need to be considered from a technological standpoint, one being understanding the target audience. Advertisers should shift their mindset from targeting individual viewers to individuals within households. Similarly, advertisers accustomed to linear TV should recognize that their goal is not to “reach 20 million homes at once” but rather to achieve their desired audience an impression at a time. This shift in perspective is vital for effective targeting in the streaming landscape; hence, SVOD platforms must consider providing these capabilities to advertisers.
Another crucial consideration is the ad environment quality. The ad placement within the content stream can significantly impact brand lift and perception. Advertisers must ensure that their ads appear in an environment that maximizes their impact. The media environment plays a big role in determining the effectiveness of an ad impression, ultimately influencing the advertising campaign’s success.
Embracing and aligning with Automatic Content Recognition (ACR) technology is also beneficial for streaming services. When integrated into Connected TV (CTV) environments or Over-the-Top (OTT) ad-based video streaming applications, ACR empowers the recognition and identification of streaming content down to individual objects within a video. ACR offers a wide range of advantages, including frequency optimization for ad efficiency, reach control, improved targeting capabilities, and valuable data collection functionalities.
Additionally, AI-based visual analysis and scene detection are essential in ad placement and sentiment metadata generation. Various AI-based video analytics tools provided by tech giants such as Amazon Rekognition, Google Cloud Video Intelligence, and Microsoft Azure’s Video Indexer offer visual analysis and scene detection solutions. They can be leveraged by streaming services to identify appropriate locations or timeframes within videos to insert contextually relevant ads.
AI also enables rich metadata extraction by identifying objects, activities, and scenes in videos, including spoken words, closed captions, tags, and transcripts. This metadata enhances search and discovery capabilities, contributing to a more personalized and engaging viewer experience.
With the help of these strategies, streaming services can effectively implement streaming ad analytics, optimize their advertising strategies, and deliver a more personalized and impactful viewer experience.
We Will See More SVOD Services Introducing Ads in the Next Two Years
A new study conducted by NPAW, a video analytics and business intelligence company, reveals a significant shift in the advertising strategies of SVOD services. According to the study, most SVOD companies are planning to introduce ads within the next two years, indicating a shift toward diversifying revenue streams.
For services that have not yet incorporated ads into their SVOD monetization strategies, advertising revenues are firmly on the roadmap. In fact, 76% of surveyed SVOD services plan to change their business models to include ads by 2025, transitioning to either a purely ad-based business or a hybrid model.
The study also highlights the growing recognition of the importance of advertising analytics for ad-based SVOD services. All surveyed ad-based streaming companies currently not utilizing third-party advertising analytics tools plan to adopt them this year. This suggests an increasing emphasis on leveraging robust analytics tools to gain valuable insights and optimize ad performance.
These findings align with industry trends and market expectations. As reported by various sources, including Advanced Television and Digital TV Europe, the study underscores the industry’s anticipation of a substantial increase in ad-supported SVOD streaming services. The introduction of ads by a significant number of SVOD companies within the next two years is expected to reshape the streaming landscape, driving both revenue growth and the adoption of advanced advertising analytics tools.
The shift toward ad-based SVOD services reflects the evolving dynamics of the streaming industry. SVOD services recognize the potential of advertising as an additional revenue stream, and many are actively planning to capitalize on it. By embracing advertising analytics tools, SVOD services can gain deeper insights into viewer behavior, optimize ad targeting and placement, and enhance the overall effectiveness of their advertising campaigns.
For in-depth insights into streaming advertising analytics and broader expertise in the video industry, explore DataArt Video Expertise Page.
Author: Max Kalmykov
Vice President of Media and Entertainment Practice at DataArt
Originally published on https://www.dataart.com/blog.
