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Online video viewers see ads as something to be tolerated but rarely enjoyed. No matter an ad’s production quality, viewers may turn away if they feel overburdened. But as an essential source of revenue for many online video services, ads seems here to stay. Ad spaces must be sufficiently robust to be effective, yet geared to be only as burdensome to viewers as they will tolerate. Just where that line is where advertisers get their money’s worth, service providers see sufficient revenue, and viewers don’t turn away in annoyance is key to an online video providers survival. The subject of a Streaming Video Alliance webinar, the challenge of finding the right balance of ads vs online content is drawing increasing industry attention.

A virtually limitless array of KPIs can be set and tracked to identify the optimal levels of advertising that will keep audiences tuned in. How are your 30-second pre-roll ads working with weekend iPad users in North America? If you see high quit rates, dig deeper to identify general trends in a region, or to explore which segments of your audience show a greater or lesser tolerance for a particular combination of ads by length, number, position, and quality. What about the day of the week, for example? Perhaps these long ads are tolerated on weekends or evenings, but not weekdays. When it comes to live content, you can determine, for example, whether poor ad quality or a large number of ads faces greater resistance from users. An NPAW study found, for example, that only 2% of users dropped off during mid-roll ads that were less than 30 seconds, while the drop-off rate jumped to nearly 50% on ads longer than 50 seconds. By focussing on where you see users turning away from ads, the right adjustments to ad quantity, length, position, type and frequency can be made to match specific audience’s tolerance. There is always a point at which placing another ad would result in diminishing returns as it would provoke a user to turn away from the service. Finding this point and placing ads accordingly should be a primary aim of any advertising department.

As an advertising manager at an online video service, placing ads should not be a guessing game. You need to know what’s working, what isn’t, and why. Monitoring your ad strategy with business intelligence tools like SmartAds by NPAW reveals the reasons ads are failing to engage your audience, helping you to minimize your viewers’ frustration and keep your advertisers satisfied that their campaigns are having an impact on their targets. For your AVOD to compete for audience against limitless alternative online content, the quantity, type, and positioning of your ads should be decided based on the solid, easily understandable data on your users’ behavior, demographics and experience that SmartAds provides. This module also provides added transparency, building trust and credibility between ad servers and video services with a third-party, neutral view of ad performance data.

The path forward for the industry was laid out recently by Anna Bager, senior VP, and GM for the mobile and video centers of the Interactive Advertising Bureau (IAB): “If you’re a marketer, you need to pay attention to OTT, because that’s where the audience is moving.” And OTTs, by consequence, need to gear themselves to cater to advertisers in a way that does not turn away their viewers. It’s a balancing act, but one that can be managed with the right data tools.

Research & Editorial Team on January 18th 2018

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