NEWS16 November 2022

AVOD to become more popular in 2023, says Kantar

Innovations Media News Trends UK

UK – Advertising-based video-on-demand (AVOD) will grow and marketers will need to do more to prepare for a post-cookie world in 2023, according to analysis of next year’s media trends and predictions by Kantar.

Watching TV on a tablet computer

In its report Media Trends and Predictions 2023, Kantar’s annual forecast on media industry trends, the company predicted that AVOD would be more accepted by consumers and provide an answer to current inflation concerns.

Kantar said that AVOD grew in market penetration in the US from 20% in the second quarter of 2021 to 23% in the same quarter in 2022, and suggested the timing was right to introduce ad-funded tiers to limit price increases.

The news follows recent proposals by some streaming platforms, most notably Netflix, to add advertising, including more expensive ‘tiers’ of membership that were ad-free.

However, Kantar warned advertising models risked creating two types of viewers: those who had less disposable income who would be over-targeted by ads, and those with more disposable income who would be harder to reach despite being more attractive to advertisers.

The report also said that marketers should prepare for a post-cookie world by experimenting with proxy-based targeting systems and contextual advertising.

Kantar said that targeting within closed ecosystems, in which consented first-party data is available, will still be possible, but wider cross-platform targeting would fall victim to consumer privacy.

For this reason, Kantar said initial assumptions about the granularity of targeting outside closed ecosystems may have to be reappraised.

Video on demand (VOD) platforms will increasingly use hybrid approaches balancing VOD with linear content, such as ‘appointment TV’ and curated content discovery instead of all-at-once release strategies.

Dynamic product placement, where products, billboards or screens on a show could be substituted for another brand, is also edging closer, said Kantar.

However, Kantar added the technological possibilities of dynamic product placement will need to be balanced against what’s acceptable to audiences, especially if a placement is clearly anachronistic, jarring or out of place.

Media companies will also need to respond appropriately to advertisers’ and consumers’ Net Zero ambitions, concluded Kantar, and reduce the carbon impact of media.

John McCarthy, strategic content director, media division, at Kantar, said: “We foresee a year full of challenge and opportunity for the media industry.

“As global price rises impact consumer spend and advertising, campaign planning could be optimised through improved data application, making budgets go further.

“From post-cookie solutions to better campaign planning, data is our fuel – but its usage is changing. The future will continue to deliver a host of new technologies, each brimming with potential, and it’s important not to get lost in the hype.”

@RESEARCH LIVE

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