Advertising-based Video On Demand Market Size, Share & Trends Analysis Report By Advertisement Position (Pre-roll, Mid-roll, Post-roll), By Device, By Enterprise Size, By Industry Vertical, By Region, And Segment Forecasts, 2023 - 2030

Advertising-based Video On Demand Market Growth & Trends

The global advertising-based video on demand market size is expected to reach USD 226.57 billion by 2030, growing at 29.0% CAGR from 2023 to 2030, according to a new study by Grand View Research, Inc. Advertising-based video on demand (AVOD) is a monetization approach in which advertisements are placed in a video to monetize it, and in all cases, the content is free for the user to watch. AVOD services offer free on-demand video content to viewers via an advertising-supported model. Publishers receive payment from marketers to showcase their advertisements on streamed video content, which aids advertisers in building brand awareness and driving conversions.

AVOD platforms measure the effectiveness of targeted ads by analyzing user behavior and engagement metrics, revenue, and conversion rates. AVOD service providers can gather comprehensive data from their platforms, encompassing audience reach, preferences, demographics, user behavior, engagement metrics, and revenue. By leveraging suitable software tools to analyze this data, service providers can enhance user recommendations, target ads more effectively, boost engagement, and optimize revenue generation. Furthermore, AVOD platforms can track ad impressions, clicks, and conversions to assess the performance of targeted advertisements. Through the analysis of these metrics, AVOD platforms can identify the most impactful ads and make necessary adjustments to their targeting strategies.

AVOD platforms give consumers free access to various video content, such as movies, TV shows, web series, and more. This appeals to audiences that prefer to avoid paying for subscription-based services or want more content alternatives than paid subscriptions. In addition, advertising-based video on demand platforms allow content creators and rights holders to monetize their content through advertising income. Embedding adverts into the viewing experience, content providers may make revenue while continuing to deliver free material to users.

Such trends are anticipated to drive market growth over the forecast period. However, excessive, or invasive advertising can irritate and alienate viewers. If commercials inundate consumers or they find it disruptive to their viewing experience, they may abandon AVOD platforms entirely. Data privacy concerns and evolving regulatory frameworks can also hinder market growth. Stricter data collection, targeting, and user consent regulations can impact how AVOD platforms operate and target advertisements, potentially affecting their advertising revenue and business models.

The COVID-19 pandemic has had a huge influence on the AVOD industry. On the one hand, it has increased demand for AVOD services as people hunt for methods to watch free or low-cost entertainment at home. On the other hand, the epidemic has resulted in a drop in advertising income as firms reduce their marketing spending. The pandemic also led to an increase in the use of AVOD services by advertisers. Advertisers are looking for ways to reach consumers spending more time at home, and AVOD services offer a cost-effective way. As a result, the amount of advertising revenue generated by AVOD services is expected to grow in the coming years.

Pluto TV, a free ad-supported streaming service, experienced a growth of 10.4 million monthly viewers throughout 2019, and an additional 1.8 million viewers were added in the first quarter of 2020. Tubi, another free ad-supported streaming service, saw its monthly active users increase by 40% in the first quarter of 2020, resulting in a net increase of 33 million active users.

The Roku Channel, a free ad-supported streaming service that is available on Roku devices, saw its viewership increase by 60%, resulting in a net increase of 8.9 million active users in the fourth quarter of 2020. While the COVID-19 pandemic posed obstacles for the AVOD business, it also provided opportunities for creativity, adaptability, and new methods of engaging viewers and marketers. Advertising-based video on demand platforms that successfully handled the crisis and responded to new dynamics are well-positioned for post-pandemic development.

Advertising-based Video On Demand Market Report Highlights

• The pre-roll advertisement position segment is anticipated to grow at the fastest CAGR of 30.4% throughout the forecast period. The primary objective of this type of advertisement placement is to strike a favorable balance between generating ad revenue and ensuring a positive user experience
• The laptops and tablet PCs segment is anticipated to grow at the fastest CAGR of 30.3% throughout the forecast period. Laptops and tablets are favored devices for video consumption due to their larger screens, which provide a more immersive viewing experience compared to smartphones or mobile phones
• The small and medium enterprises (SMEs) segment is expected to grow at the fastest CAGR of 29.9% throughout the projected period. AVOD platforms offer SMEs an affordable advertising channel to promote their products and services. By utilizing AVOD platforms, SMEs can reach a wide audience without incurring the high expenses typically associated with traditional advertising channels
• The media & entertainment segment is expected to grow at the fastest CAGR of 30.9% throughout the forecast period. AVOD platforms offer media and entertainment enterprises a large distribution network via which they may reach a large audience
• The Asia Pacific region is expected to witness the fastest growth at a CAGR of 30.2% over the projected period. The regional growth can be attributed to the increased internet penetration, rising demand for online video content, and the shift toward digital advertising

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