Ad loads: BVOD and DOOH need to avoid pay TV's mistakes
BVOD and digital out of home are growing rapidly in terms of ad revenue, but they are at risk of shooting themselves in the foot by not managing ad inventory properly and therefore turning off consumers.
Key points:
- BVOD and digital out of home (DOOH) are growing rapidly in terms of advertising spend, reflecting improved content, their growing popularity with consumers and increased investment by media owners.
- DOOH installations have thrived around the country, fuelled by new technology and the willingness of OOH operators to invest in upgrading their networks.
- Yet we are we are witnessing a failure in the management and understanding of each format’s ad loads. The result is poor control over the quantity and even the quality of ads, with both formats being crammed full of ads that risk of turning people off.
- Reviewing a recent study on advertising effectiveness, Foxtel Media CEO Mark Frain commented: “It should not be surprising that fewer ads and a more highly engaged audience leads to better advertising outcomes. But in today’s highly dynamic and fast evolving media environment, it is easy to lose sight of the power of higher quality content in delivering advertisers a more valuable proposition.”
- We must also understand that BVOD is competing against SVOD, which has skyrocketed in popularity in the past five years, putting pressure on BVOD operators to maximise returns while competing for eyeballs.
Ironically, Foxtel is a good example of bad ad load management. It was originally launched as an advertising-free platform, but that model didn’t last long. Now, some Foxtel channels are crammed full of commercials, with ad loads that often feel the same as the commercial free-to-air networks (they are not the same, of course). Anecdotal evidence indicates that the perception of excessive advertising content is one of the reasons about 70% of Australians have opted to not subscribe to Foxtel.
When it was conducting the research for the same aforementioned study on advertising effectiveness, the insights company Nature found that the lower ad loads on Foxtel translated to more positively engaged audiences. That is something BVOD operators need to remember. BVOD is not like linear TV. The ad load principles that they are using for linear TV do not translate across to BVOD and have the potential to turn people off the platform.
Yes, viewing of BVOD is booming and ad revenue is following. But the free-to-air networks running the BVOD platforms need to consider an alternative ad load model, one that is retro-fitted specifically for BVOD consumers to keep their momentum going.
Ad loads may seem heavy on free-to-air TV. But it’s a regulated medium so there is a well-understood ad volume maximum, unlike the self-regulated OOH sector.
DOOH diligence
It’s up to media owners to decide how many ads are in a rotation and how long they are seen. Unfortunately for the OOH sector, this issue still hasn’t been completely resolved since the rapid growth of DOOH started in 2017 and oOh!media and APN Outdoor had very different views on the rules defining share of voice. Third-party verification supplied by companies such as new entrants Seedooh and Veridoo are now in place and are improving transparency, but this is about proving what a client received after the fact. The long-awaited upgrade of MOVE announced in January – with a qualitative assessment to track audience impact alongside the new quantitative measure – will hopefully be key to a more in-depth and shared understanding of the value of both format and ad load.
Back in the TV world, as we continue to see massive growth in connected TVs in 2021, we can safely assume that BVOD is going to be around for a while and will continue to get more targeted and personalised for the consumer. With connected TVs comes better measurement for advertisers, which means that operators are going to have to be strategic about their ad loads. TV companies, of course, will always say it’s about price and insist it is agencies and clients who are responsible for driving down rates, therefore increasing fill rates which then have the potential to degrade consumer experience.
How do the sellers ensure they don’t get into the same pickle the networks have been experiencing as linear TV audiences decline? Careful inventory management and tracking of e-CPM, alongside tracking viewer drop off will be critical and, of course, increased supply. Most importantly, however, will always be perceived value and media companies will have to hold their ground!
