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The Era of AVOD: Which Metrics Matter Most?

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There’s never a dull moment in the streaming services.

Most recently, reports have surfaced that Disney+ might add cable-style streaming channels focused on Star Wars and Marvel content to its service. While viewers would need Disney+ subscriptions to watch, the channels would also likely be ad-supported—representing the latest in what seems to be the ongoing blurring of lines between streaming services and traditional TV. 

This latest news, combined with other recent changes to bring more ads into popular streaming services, presents advertisers with an opportunity to connect with a vast and highly engaged audience. The AVOD market is poised for explosive growth, with projected global revenue exceeding $48.32 billion by 2024 and a staggering 3.4 billion users anticipated by 2027.

This growth is further amplified by the rising average revenue per user (ARPU), expected to reach $16.29 in 2024. Advertisers can seize opportunities to enhance their return on investment and effectively engage with a global audience.

While all types of CTV grant access to sizable audiences on connected TVs, their characteristics vary considerably. For advertisers considering AVOD, understanding where their ads are shown, what happens after they’re displayed, and what actions viewers take is paramount. 

Tracking and understanding campaign success means monitoring the right metrics—the ones that truly matter to a campaign on an AVOD service. But which metrics should those be?

AVOD Metrics That Matter 

In general, advertisers’ KPIs within CTV advertising tend to be focused on reach, targeting, and campaign optimization for better engagement. Within the AVOD space, here are the metrics that should be prioritized.  

Engagement Metrics: 

Video completion rate (VCR): This metric measures the percentage of all video ads that play through from start to finish. A good benchmark is 95+ percent for CTV campaigns. If VCRs don’t reach this benchmark, then the creatives may not be effectively engaging viewers within the first three seconds of an ad. 

Viewable impressions: This metric represents the number of times your ad was actually seen by a viewer. While impressions measure the number of times your ad was displayed, viewable impressions track whether those impressions were actively watched. One of the best things about CTV is essentially all the impressions are viewable as they are taking up the entire screen.

Visibility Metrics:

Viewability: Viewability is a percentage that measures how easily your ads are seen. This metric is calculated by dividing viewable impressions by the total number of impressions. 

Average watch time (AWT): Average watch time is the average amount of time a viewer typically uses an AVOD service. Adults in the U.S. spent close to two hours a day viewing their CTVs in 2023. On average, how much of that time is spent viewing the AVOD platform on which your campaign is running?

Performance Metrics:

Win rate: This measures the proportion of successful bids an advertiser wins out of the total number of bids submitted in an ad auction, campaign, or marketplace.

Segment Performance: This involves analyzing how different demographic segments respond to advertisements. Dimensions like age, gender, location-based performance, and device usage can provide insights into how effectively a brand’s targeting criteria are being met. Advertisers should collaborate with their ad tech partners to gain transparency into this granular data.

Conversion rate: In the context of AVOD, the conversion rate measures the number of times viewers eventually take a desired action. This could be anything from visiting your landing page to making a purchase. While some ad formats are currently more measurable than others for conversions (e.g., scanning a QR code to install an app), platforms are continuing to add more measurement capabilities for performance. High conversion rates mean your ads are working.

If a metric is not measured, it cannot be improved. Tracking the right AVOD metrics is crucial to making insightful decisions as an advertiser. Monitoring the metrics above will tell you if you are partnering with the right AVOD service, as well as how effective your campaigns will be in reaching your target audience.  

[Editor's note: This is a contributed article from Verve Group. Streaming Media accepts vendor bylines based solely on their value to our readers.]

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