Thursday, December 17, 2020, 9:47 AM ETPosted by:Stewart Schley
SVP and Lead Analyst, One Touch Intelligence
In the political arena, the 2020 U.S. election may seem like the event that never ends. But for the ad-supported streaming video category, a surge of political advertising has now subsided, returning the fast-growing AVOD business to something approaching normalcy.
What “normal” means in the AVOD camp is different, of course, from the broader ad-supported television economy. For one thing, AVOD participants like ViacomCBS’s Pluto TV and the Crackle video service tend to insert significantly fewer advertisements per hourly viewing session than what viewers elsewhere have come to expect. An ad-load analysis for November shows that even though these two services topped the AVOD charts for total ad time, their totals remain well less than the 16 minutes or more per hour typically seen in the national television network ecosystem.
During November, Pluto TV registered an average of less than 10 ad minutes per hour across programs monitored within the ADTRAKER® data service managed by One Touch Intelligence. Crackle, owned by Chicken Soup for the Soul Entertainment Inc., was next in line, clocking in at slightly more than eight minutes per average hour.
No other AVOD streaming service among the nine we track reached those levels, based on our monitoring of multiple program sessions during November using a Roku device. NBCU’s Peacock, Fox Corp.’s Tubi, Amazon’s IMDb TV and Comcast’s Xumo all came in at less than six minutes per hour, suggesting there is some coalescing around roughly the five-minute mark as a tacit industry standard.
The limited ad loads don’t mean demand isn’t vibrant, however. During the third quarter, Crackle saw both sellout levels and CPM rates rise, with some inventory fetching nearly double the rate CSS Entertainment was able to apply in earlier quarters, according to comments from Chairman/CEO William Rouhana in reviewing Q3 results.
As for political, the category vanished as expected in November after accounting for fully 10% of all ad time in the preceding month, when candidates and campaigns made up the No. 1 ad category for the AVOD group. Instead, a cross-section of well-known brands made frequent appearances across the AVOD camp in November, with top advertisers including Geico, Verizon, Progressive Insurance and Toyota.
Also of interest: We saw a significant amount of local advertising in the AVOD category. For example, four of the top 25 advertisers (by frequency of appearance) we catalogued on the Xumo service in November were local (Denver-market) companies.
The presence of well-known consumer brands, a significant share of local advertising, and a big role for political leading into November suggest that the AVOD streaming category continues to make inroads into the mainstream television advertising economy. This is a point Rouhana made recently in pointing out that Crackle saw spending increases both from larger existing advertisers and new-to-Crackle advertisers during the 2020 third quarter. “We believe a number of advertisers are beginning to transition greater portions of their budgets through our AVOD due to overall viewership growth,” he said.
A key question going forward will be whether AVOD players continue to resist the temptation to decorate schedules with increasing amounts of commercial time. For now, low ad loads appear to be a meaningful part of the consumer value equation for the increasingly popular ad-supported video streaming category. So long as AVOD streamers keep commercial intrusions limited, it’s likely viewers will continue to drift into the category – and advertising budgets will continue to follow them.