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AVOD Platforms Provide New Ad Opportunities, Nielsen Reports

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NEW YORK—It is no secret that advertising took a hit in 2020 because of the impact of the COVID-19 pandemic, but from those challenges a new potential avenue has been found—the emergence of ad-supported (AVOD) and linear streaming platforms.

Nielsen dove into the advertising market as part of its latest Total Audience Report. Broadly, advertising spending dropped from $132 billion in 2019 to $112 billion in 2020, with the biggest hits coming in the second and third quarters of 2020 (down 28% and 25%, respectively). Interestingly, TVs share of that overall spend actually increased from 64% to 68% for the full year.

This happened even as pay-TV lost subscribers and streaming subscriptions went up. This is because included in the streaming platforms like Netflix and Disney+, which offer ad-free services, ad-supported streaming platforms like Hulu and Peacock as well as linear streaming through cable provider apps have also grown over the last year.

As of January 2021, AVOD and linear streaming accounts for more than a third (34%) of the streaming share among streaming capable homes. That is an improvement from January 2019 when it accounted for 28%. It is even more popular in certain demographics: In Black homes AVOD and linear combine for 45% of streaming share, including 33% of AVOD; they are just beaten out by Asian Americans, who use AVOD services 34% of the time.

(Image credit: Nielsen)

It’s not just the ability to have traditional ads inserted into programming, ad-placement is also proving to be a big opportunity in non-ad supported environments as well. Two-thirds (66%) of people between the ages of 35-49 said they’ve taken note of a brand because it was being used in a show they streamed; it’s 62% for those 18-34. Just more than half (52%) of those 35-49 year olds and 49% of 18-34 year olds are actually influenced to purchase products based on seeing them in streaming programs, Nielsen found.

“The reach and influence of campaigns in this emerging area is a tantalizing opportunity for brands that should be too good to pass on,” Nielsen wrote in the report.

For more information, download the full Total Audience Report from Nielsen’s website.