Can interactive advertising make a difference for AVOD services?

By Jim O'Neill on Jul 28 2016 at 10:30 AM
TVRunway launches new interactive ad service with Stream Now TV

Most media companies earn money from over-the-top video in one of two ways: through subscriptions or through ads. SVOD dollars are on the rise as services continue to sign up new users, and some analysts predict SVOD services will be able to raise their subscription rates as premium content becomes the norm.

AVOD content, meanwhile, also is gaining traction in the market as it’s familiar territory for broadcasters, cable networks and other publishers. Worldwide online video ad revenue is expected to reach $45.5 billion by 2021, $16.8 billion in the U.S. alone, according to Statista’s Digital Outlook.

But, as ad loads increase on Internet video, some users are pushing back, installing ad blocking technology that could cost publishers and broadcasters upwards of $27 billion in lost potential revenue by 2020.

Ad-reinsertion technology is one answer that’s being adopted successfully for browser-based video. Ooyala’s Q1 2016 Global Video Index found that publishers could see ad impressions increase by as much as 23%, using ad-reinsertion technology, while broadcasters could see increases of 15% or more.

Other advertising solutions also are surfacing, adding tools for publishers and broadcasters, including sponsored content and interactive content.

One example of an interactive option is TVRunway, an interactive search engine that allows users to click on women’s clothing worn in any video they’re watching, launched publicly today, giving content distributors another monetization option.

The technology, which launched today on Stream Now TV – an aggregator of older Indie films, shorts and TV episodes -- requires no tags, pins, or prior edits to the video, nor does it require a user to download any apps. Instead, TVRunway’s API integrates on video distributors’ websites then machine learning matches the requested item with what more than 300 retailers –Bloomingdale’s, Saks Fifth Avenue and Target among them --  have for sale at that moment. TVRunway doesn’t charge video distributors for the service, instead it pays them part of the retailer’s participation fee, creating a new revenue stream.

Terena Bell, co-founder and CEO of TVRunway, says she believes interactive technology is an appealing option for viewers who may have moved online to avoid traditional commercials.

“With TVRunway, the user is in control,” Bell said. “She’s watching the show she wanted to watch already, and she decides when to learn more about something in it. It’s the pull--not push – approach that video advertising desperately needs.”

TVRunway currently works on just Chrome and Firefox.

“The entire industry needs a shakeup to adapt to the changing viewing habits of consumers,” said Stream Now TV CEO, Ron Valderrama. “The younger demographic in particular will benefit from partnerships like this.”

Stay tuned.

Follow me on Twitter @JimONeillMedia and on LinkedIn

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