- There will be more ad-supported video on demand (AVOD) services next year, as new players like Disney+ and Apple TV+ enter the video streaming business, according to a report from Informa Tech's IHS Markit Technology shared with Marketing Dive.
- The new AVOD opportunities are forecast to lift U.S. revenue for online video advertising to $27 billion in 2023, a compound annual growth rate of 11% from 2018 to 2023, per the report. Facebook and YouTube are expected to continue leading the market through that year, followed by Hulu, Roku and Tubi, which will carve a greater slice of market share.
- "Ultimately, the winners and losers in the AVOD industry will be determined not only by content, but also by data strategies and user acquisition," IHS Markit's Senior Research Analyst Sarah Henschel said in the report.
The streaming wars between big players like Netflix, Amazon and Disney+ have simultaneously advanced and benefited from the cord-cutting trend, driving consumers to view more digital video content. New service debuts like Disney+ and Apple TV+ opens up additional ad inventory, meaning more opportunities for marketers to get in front of consumers.
Disney+, the newest entrant in the burgeoning space, was downloaded 22 million times worldwide in its first month, according to data from app researcher Apptopia. Disney+ has 9.5 million daily active users and has so far brought in $20 million in app revenue, the research estimates. The strong performance for the Disney+ mobile app signals that audiences are making smartphones and tablets a key part of their daily video consumption.
Ad software firm Extreme Reach found in October that video ad impressions on connected TVs grew to 50% of the total in Q2, up 31% from the same period a year before. That growth meant that CTVs had twice the video impressions than mobile devices. Advertisers appear to be gravitating toward premium content that people want to watch on the biggest screen in their homes rather than on smaller devices like mobile, tablet or desktop.
As the AVOD market rapidly changes amid a flurry of streaming service launches and cord-cutting, where and how to buy TV ads is evolving, a development that will likely create opportunities and confusion for advertisers. The growing options for where and how to place TV ads is creating a fragmented landscape that will likely become even more crowded as programming providers like Amazon, Hulu and Disney race to capitalize on consumers ditching traditional cable, causing more non-traditional players to wedge into the game and battle for coveted viewer attention.