SVOD vs AVOD and other takeaways from Nielsen’s CTV Summit
With the upfronts slated for next week, agencies, broadcasters and platforms are each gearing up to make their pitch on how much television has changed following an unprecedented 2020 calendar year.
Connected TV has been at the forefront of that discussion and during the Nielsen CTV Summit on Wednesday, industry leaders from Disney, PepsiCo, Samsung Ads, The Trade Desk and Essence Global discussed what’s top of mind for their own businesses, as well as their clients.
Here, we share three takeaways from the single-day virtual event.
AVOD versus SVOD
Both AVOD (ad-supported video on demand) and SVOD (subscription video on demand) are poised for bright futures, as each serves specific needs for consumers. Though there might be some downsides, Adam Gerber, president of agency Essence Global, said.
“If you’re a marketer you have to understand that for every hour of linear TV that shifts to AVOD, that it reduces the amount of ad time that’s available to purchase by more than 50 percent,” Gerber said. “For every hour of linear TV, there’s 16 minutes of commercialized time, but AVOD services have been very public about how they want to keep their commercial time under seven minutes.”
Gerber says that as consumption shifts, AVOD services may have to double their ad capacity so advertisers who are trying to implement campaigns can reach their audiences. “Understanding how the shift from linear to AVOD impact supply in the marketplace in terms of growth is one thing, but understanding how the shifts impact supply is a critical part of the discussion,” said Gerber.
Gerber also correctly pointed out how marketers have greater data-driven tools at their disposal when executing CTV ad buys, allowing them to shift their strategies from content-first (linear) to audience-first (CTV). Consumers, meanwhile, are the ones driving this change — not the industry.
“I don’t expect there will be pricing equilibrium,” he said. “I believe we’re moving to a new model where I need to think of audiences differently … CTV is a different product [from linear]. I’m buying an audience and not a blunt instrument with duplicative audiences.”
Acceleration of change
The way consumers watch TV is changing at a faster clip than ever. Viewers are cutting the cord in record numbers and they’re doing so across all age groups, said Tim Sims, chief revenue officer at The Trade Desk. “Things are becoming more technologically possible at a very rapid pace,” Sims said. “What I’m excited for is what this acceleration means for the future, because I think we skipped a few years of natural change and we’re now in this moment where we’re going to unlock massive potential for marketers.”
Linear TV isn’t going anywhere, said Sims, who emphasized that it’s critical to bridge both CTV and linear from a measurement and KPI perspective. Sims’ remarks on acceleration were also made apparent during the panel, when Samsung — a brand widely associated with making smartphones and television sets — spoke about the growth it's seeing through its advertising arm, Samsung Ads.
Samsung Ads says it saw an 84 percent increase in monthly activities on its platform. “TV has become a cultural lifeline for a lot of folks during the pandemic,” said Justin Evans, global head of analytics and insights at Samsung Ads. “One of the dynamics we’ve seen is AVOD — advertising-supported streaming — has grown 95 percent [when compared to 2019].”
“So, the myth that people are streaming more, but advertisers can’t reach them” no longer holds true, Evans added.
A whole new audience of buyers
The shift to CTV has allowed powerhouse companies such as Disney to launch their own self-serve platform. That’s attracted a new group of buyers who otherwise wouldn’t have the opportunity to advertise alongside Mouse House’s premium content, Lisa Valentino, exec VP of client and brand solutions at Disney Advertising Sales, said.
“We have a thousand customers who never could have accessed Disney,” Valentino said. “We don’t look at that as a small-and-medium-sized-business self-service application. We think about that as an enterprise-wide solution in the future.”
Although self-serve opens doors for smaller brands such as direct-to-consumer, it won’t ever replace traditional ad buys for tentpole events such as the Rosebowl, says Valentino. “But there are capabilities that can accelerate media, targeting and creative,” she said. “You’re going to see that combined with our other businesses and we believe it’s going to be a game-changer for us.”
The company says it aims to have 50 percent of sales automated.