You have a killer CTV app, and now you want to start monetizing it.
Now the big question is how to go about doing that in a way that will generate the highest possible revenue.
In this article, we’ll explain everything you need to know about monetizing your CTV app with ads, also known as the AVOD model.
What is AVOD?
AVOD, or advertising-based video on demand, is the most popular method used by CTV publishers monetize their apps.
This model utilizes video ads to generate revenue, allowing viewers free and unlimited access to your content in return for viewing ads.
The AVOD method differs from other CTV monetization models, like SVOD, TVOD, which rely on subscriptions or pay-per-view to generate revenue.
Benefits of AVOD
The AVOD CTV monetization model has become increasingly popular due to its two significant benefits:
Attracting Viewers with Ease
Viewers are constantly on the lookout for high-quality content that is also free. AVOD hits the jackpot by combining both these aspects, making it an effective monetization model.
A prime example of this success is YouTube, which currently boasts a massive 2.6 billion monthly active users thanks to its AVOD model.
With smart ad placements and frequency, most users are comfortable watching ads in exchange for free content. As a result, AVOD streaming services are rapidly outpacing their subscription video on demand (SVOD) counterparts.
According to Comscore’s 2022 State of Streaming analysis, U.S. households have increased their usage of AVOD services by 29% from 2020 to 2022, compared to only a 21% increase in SVOD services.
Advertisers are Focusing on CTV
As CTV continues to rapidly rise in popularity, advertisers are flocking towards CTV apps.
Advertisers are willing to pay much higher CPMs for CTV ads than for traditional digital advertising. This is because CTV ads offer advanced targeting, high viewability, and larger budgets.
Drawbacks of AVOD
There are two main downsides to the AVOD model that you should be aware of.
Although most of us have become accustomed to seeing ads and understand the tradeoff between seeing ads and accessing free content, ads can still be a turn off for some.
As a publisher, you must find the right balance between ad type and frequency. You want to show enough ads to generate revenue, but not so many that it overwhelms the viewer.
Ad revenue can fluctuate due to factors beyond a publisher’s control, like an unstable market.
During a market downturn, advertisers tend to reduce their ad spending, which leads to a decline in revenue for publishers.
How to Implement Ads in Your CTV App
To implement ads in your CTV app, you’ll need to partner with a monetization company that specializes in programmatic advertising. Monetization companies can serve ads to your viewers, target the right audience, and delive the right ad at the right time.
Here are the steps to follow:
Choose a Reputable Monetization Partner
Look for a monetization company with a strong reputation for delivering high-quality ads and offering robust targeting capabilities.
Integrate your Partner’s SDK
To serve ads, you’ll need to integrate your partner’s software development kit (SDK) into your CTV app. This will enable the provider to serve ads to your viewers during programming.
Configure Ad Preferences
Work with your monetization partner to configure ad preferences such as ad format, ad placement, and ad frequency. This will help ensure that ads are delivered in a way that is optimal for your audience and your revenue goals.
How to Maximize Your CTV Ad Revenue
Competition is the name of the game when it comes to CTV ad monetization. The more top-notch advertisers you have vying for your ad inventory, the higher you can charge for it. But the challenge lies in accessing all those advertisers.
Google has the world’s largest ad exchange, making it the go-to for publishers looking to attract quality advertisers. However, Google was a little late to the CTV party, only releasing its first CTV monetization product in 2022.
As a publisher, partnering with a monetization company like Adnimation that has access to Google’s demand is crucial.
Doing so will help you tap into the power of competition, driving up your revenue in the process and yielding significant results.
To learn more about Adnimation can help you access Google’s vast CTV video demand, feel free to get in touch with us today.