US study shows how advertising in free VOD works for brand marketers

Advertising in video-on-demand (VOD) programming offers specific advantages for brand marketers to effectively engage consumers, according to the Phase II study of the Advanced Advertising Media Project (AAMP) — an industry-wide research initiative to measure the impact of advertising within free VOD.

The study, which examined the viewing behaviour in the US of more than 1,000 consumers, revealed that advertising within a VOD environment has a positive impact on the level of engagement of consumers – enabling agencies, cable operators and networks to leverage full, linear TV ad loads, while allowing advertisers to utilise longer-form approaches that can serve as avenues for enhanced creativity.

Conducted with television programming from 11 AAMP member broadcast and cable networks and branded messaging from 10 national advertisers across six categories, the AAMP study revealed four basic themes:

• Advertisements within a VOD context statistically have the same impact, no matter what the size of the ad load
• Because consumers view VOD as television, they accept advertising on VOD as a logical part of the on-demand experience
• On-demand television has a positive effect on consumers’ sense of control over content and advertising
• VOD provides opportunities for increased ad durations that can foster greater storytelling and information sharing by advertisers

“When it comes to advertising, the ‘TV Environment’ absolutely matters,” said Bill Koenigsberg, president, CEO and founder of Horizon Media. “If there is one finding from this study that is particularly relevant to the media industry, it’s this: consumers will watch, recall and respond even to heavy loads of ads within VOD programming.”

“The AAMP findings mirror our own customers’ favorable response to increased choice and control with their entertainment viewing,” said Marcien Jenckes, senior vice president and general manager, video services for Comcast. “Our ultimate goal is to provide our customers with the best programming content available, while providing opportunities for sponsors and advertisers to benefit from the On Demand platform.”

Conducted by Ipsos OTX, Phase II of the AAMP study tested three different VOD ad loads within 19 primetime TV shows or segments of 30 minutes each. The test formats included: a ‘Light’ load with three minutes of inventory; a ‘Moderate’ load of five and one-half minutes of advertising; and a ‘Heavy’ load which contained eight minutes of advertising. In addition, the study tested a second version of the ‘Light’ load that included a 90-second ad unit. All groups were benchmarked against the standard eight-minute linear ad load.

Participants watched comedy, drama and reality programming that contained ads from various categories such automotive, consumer products, financial services, pharmaceutical, retail and technology. The tests were conducted in custom-built media labs in New York and Los Angeles, and utilised a sophisticated set-top box VOD interface that was custom-built by NDS, a global provider of digital TV technology and advanced advertising solutions for the pay TV industry. Consumers used a specially created mobile handset app to record their experiences while viewing; in addition, in-depth follow-up interviews were conducted with 30 participants.

Among the most significant findings were clear indications that:

The size of the ad load has no impact on viewer engagement with VOD.
Aided recall of advertised brands was statistically the same (63%-64% for light loads and 58% and 59% for moderate and heavy loads). In addition, VOD ads delivered an uplift of between three and five percentage points across all loads in both interest in finding out about a particular brand, and purchase intent for an advertised brand.

Advertising with VOD does not impact viewer enjoyment.

Between 31% and 38% of participants across all ad loads rated the TV viewing experience as “excellent,” and between 65% and 75% rated the experience as “excellent” or “very good.” This compares favorably to the “excellent” (29%) and “excellent or very good” (66%) for linear television. For all ad loads, enjoyment increased throughout the show. Further, it was clear from post-test, in-depth consumer interviews with randomly selected participants that the presence of ads across a diversity of media platforms has increased acceptance of ads in general.

Consumers are more receptive to longer-form ads on VOD, and that longer-form ads can have a greater impact than traditional 30-second spots.
Viewer interest in finding out more about a particular brand featured in a 90-second ad was 64% higher than interest elicited by the same 90-second ad in linear television, and fully double the interest generated by a VOD 30-second advertisement.