What is VOD advertising?

Understanding VOD advertising

Also known as AVOD (Ad-supported Video on Demand), Video on Demand advertising delivers targeted advertisements through on-demand video content.

Unlike traditional TV advertising, where commercials run during scheduled broadcasts, VOD advertising uses streaming platforms, apps, and catch-up TV services to show ads to viewers on their personal schedules.

Popular platforms like YouTube, Hulu, and ITVX are prime examples of where VOD advertising takes centre stage. 

How does VOD advertising work?

Video advertisements are typically categorised into three types based on their placement within the content.

• Pre-roll ads: Shown before the main video begins.
• Mid-roll ads: These appear during the video, often at natural breaks or transitions.
• Post-roll ads: These are displayed after the video concludes.

Pre and mid-roll ads are usually non-skippable, ensuring that viewers watch the entire advertisement before proceeding with the content.

VOD advertising uses two main methods to show ads.

• Server-side ad insertion (SSAI): Also called ad-stitching, SSAI embeds ads into the video stream itself. The ads feel like part of the content, so they bypass ad blockers and can be personalised based on demographics, viewing habits, or location.  

   

• Client-side ad insertion (CSAI): Ads are added in real-time directly into the video player. When the ad marker triggers, the video pauses, the ad plays and then the content resumes. This method gives advertisers more control and helps them target specific audiences.

When VOD advertising is used on streaming platforms (like OTT or free ad-supported TV), it helps advertisers connect with growing audiences. 

Benefits of VOD advertising

Video-on-demand (VOD) advertising offers marketers powerful tools to target and engage audiences effectively.

Here’s why VOD advertising is on the rise.

Increasing audience reach

According to Ofcom, fewer than half of 16-24-year-olds are watching traditional TV on a weekly basis, and this shift is impacting even middle-aged viewers, with viewership dropping from 89% to 84% in just one year.

As traditional TV audiences continue to shrink, VOD is stepping in to capture a growing group of viewers who have moved away from conventional TV. 20.1 million UK households (68%) have access to streaming subscription services, offering marketers an extensive, flexible viewer base that is not tied to broadcast schedules.

Advanced targeting options

VOD advertising allows for precise audience segmentation, using factors like location, viewing habits, and search history.

This level of targeting helps ads reach viewers who are most likely to engage, improving conversion rates and ROI. 

Cost effectiveness

Research from COG Research and Dr Amanda Ellison (Durham University) found that advertisers pay significantly less for completed ad views on TV VOD.

The cost per completed ad view on broadcast VOD is around 20% cheaper than YouTube and a third of the cost of Facebook.

Advertisers can achieve more affordable and impactful results on VOD platforms, offering better value compared to social video commercials, where viewers are often more distracted.

Creative and interactive ad formats

VOD advertising offers diverse ad formats, including non-skippable ads, clickable CTAs, and interactive elements, like quizzes or polls.

This variety helps brands experiment with different approaches to maximise viewer engagement. 

VOD advertising best practices

If you are creating ads for Video on Demand (VOD) platforms, here are some VOD advertising best practices to help your ads stand out.

Add a clear call to action (CTA)

Every ad should have a clear purpose, and a strong call to action is essential for driving results. 

Using a distinct, specific CTA can increase conversion rates by an amazing 161%. Once you’ve captured their attention, guide viewers on what to do next.

Whether it’s signing up, making a purchase, or learning more, a clear call to action gives viewers a sense of direction and urgency. It should be direct, actionable, and easy to understand so viewers know exactly what steps to take.

A compelling CTA can improve your ad’s overall effectiveness, turning passive viewers into engaged participants. 

Engage your audience

A study by Microsoft revealed that the average human attention span has decreased to eight seconds, highlighting the impact of our increasingly digital lifestyles on the brain’s ability to focus.

With endless content options available, viewers have the freedom to skip ads or switch channels if they’re not interested.

To hold their attention, focus on creating ads that captivate right from the start. A well-crafted ad that resonates with an audience will increase the chances they’ll watch it through to the end instead of clicking away for something else. 

Stay relevant to the content

Ads might interrupt the viewing experience, but they don’t need to feel intrusive. Research from Integral Ad Science found that viewers were 23% more likely to remember an ad's key messages when they aligned with the content of the site hosting it.  

Ads that are aligned with the content the viewer is watching - whether in theme, tone, or messaging - feel more like a natural extension instead of an unwelcome break. Ads that seamlessly integrate into the viewer's experience make them less likely to tune out or skip ahead.

The more relevant and fitting the ad is, the more attention it will capture, ultimately improving viewer engagement and the chances of message retention.  

The bottom line

So, what is VOD advertising? It is a golden opportunity to connect with audiences in new, meaningful ways. Its flexibility makes it ideal for staying relevant in an always-on-demand world.