May 1, 2019 Partner Solutions
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.
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.
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.
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)
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)