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Report: Heavy VOD Ad Loads Are Effective

In one of the largest research projects ever undertaken on the effectiveness of VOD advertising, a new survey from the Advanced Advertising Media Project (AAMP) has come to a number of conclusions that could strengthen the business case for on demand campaigns.

Most notably, the survey of over 1,000 people who viewed network and cable on demand programming, found that the effectiveness of VOD advertising and consumer enjoyment of VOD programming was not impacted by the amount of ads in the programming.

The study also found widespread acceptance of ads on VOD, with only 6% expressing an unprompted view that there were too many ads.

When asked specifically about the ads, only 9% said there were too many ads in the 30 minute VOD program while 10% commented that there were "not too many ads."

About 11% of the respondents who watched a program with light ad load complained of too many ads, a very similar finding to those watching the medium ad load (10%) and the heavy load (12%) within VOD programs.

The study defined the light ad load as three minutes of commercials, medium as 5.5 minutes and heavy as eight minutes.

The study also found that ad recall levels were not impacted significantly by ad loads, with 63% of those viewing the light load able to recall ads, versus 58% for the medium and 59% for the heavy load.

Interestingly, respondents viewing the heavier ad loads were no more likely to fast forward through ads than those with the light ad loads.

Overall, 65% had a positive view of the ads they viewed.

Finally, in terms of the consumer experience, the survey found that the consumer experience of engagement was consistently higher than that of linear TV.

Between 31% to 38% of participants across all ad loads rated the TV VOD viewing experience as "excellent," higher than the 29% who rated linear TV viewing as "excellent" and between 65% to 75% rated the VOD viewing experience "very good" or "excellent."

In terms of engagement, the study showed rising levels of engagement throughout the program regardless of the ad loads, with an 11% increase in engagement from start to finish.

"One of the most exciting conclusions is that ad effectiveness in the VOD environment is not affected by the ad load," noted Nick Troiano, president, BlackArrow, which is one of the companies supporting the AAMP survey.  

Other members backing the project include 4As, ABC, A+E Networks, AMC Networks, CBS, Comcast, CTAM, Digitas, Discovery, Horizon Media, Intel, NBCUniversal and NDS.

That is potentially good news for programmers who have worried about the impact of VOD viewing on their C3 ratings.

To get credit under Nielsen's combined C3 ratings for linear, DVR, VOD and Web viewing, a program must contain the same ad load. The finding that heavier ad loads, which are generally about the level found in linear TV, did not hurt the consumer experience or ad effectiveness could encourage programmers to adopt the same ad loads for VOD and linear.

Michael Donahue, executive VP, 4As also stressed the importance of the findings for ad agencies.

Survey results demonstrate the effectiveness of VOD advertising "give our members another medium and give them leverage in buying more traditional media, especially network TV," he noted. "If, in addition to the upfront spending, they have the ability to spend on VOD, which is perceived as just as effective as linear TV, that gives them negotiating leverage and they like that a lot."

But the results also raise a number of questions about the best way to monetize VOD advertising.

If the survey backs the strategies of programmers like Turner that have put the full linear ad load into their VOD programming as a way of preserving C3 ratings, it also found that using different types of ads for linear and VOD might also make sense.

As part of the survey, participants consistently found longer 90 second ads more effective than 30 second spots. "It provides advertisers with another vehicle for storytelling and a very interesting format that makes good use of the VOD environment," Donahue noted.

If however, advertisers decide to put different 90 second spots in the VOD content, programmers would not get C3 credit.

"It does creates new questions about what is the right monetization scheme," notes Troiano.

The survey is second phase of AAMP industry-wide research initiative to measure the effectiveness of VOD advertising.

In the first phase, completed in September, the organization studied industry attitudes towards VOD advertising. Sometime in 2012 it will embark on phase three, which will likely involve a market trial of the effectiveness of VOD advertising.

The survey was conducted by Ipsos OTX and involved 1,000 participants who viewed 19 on demand programs from 11 AAMP member broadcast and cable networks and branded messaging from 10 national advertisers across six categories.

Additional results can be found at the AAMP Homepage.