Broadcaster VOD advertising in the UK is rapidly growing, with investment up 17.2% in the first half of 2022 and continued growth forecast, according to recent Advertising Association/WARC figures.
‘BVOD Almighty: Reach and Return’ is a new study commissioned by Thinkbox – in collaboration with Channel 4, ITV, and Sky – that reveals how and why BVOD advertising works. It is the most comprehensive exploration of BVOD advertising to date.
The study brings together a wealth of different research skillsets and techniques. It was undertaken by Gain Theory and GroupM, PwC UK, and Acacia Avenue. It employs a mixed-mode research approach, incorporating econometric analysis, advanced data science statistical techniques and machine learning, as well as ethnographic and videographic research.
Key findings include:
Campaigns that use both linear TV and BVOD are more effective than linear alone (Gain Theory/GroupM)
In terms of predictability of return, BVOD is the least risky of all video advertising – even less risky than linear TV (Gain Theory/GroupM)
BVOD adds, on average, a 4% increase in incremental Adult (16+) reach to a linear campaign, a 6% increase for Adult ABC1s, and an 8% increase for 16-34s (PwC)
The impact of video advertising is significantly affected by the platform/environment and the device viewers see it on (Acacia Avenue)
Gain Theory/GroupM’s analysis found that campaigns that use both linear TV together with BVOD are typically up to 10% more effective than linear alone at delivering ROI. Even at low spends, a diversified approach to video investments maximises short-term return.
BVOD is the least risky form of video investment
The variability of returns differs significantly across different forms of advertising. Gain Theory/GroupM found that BVOD is the least risky of all video channels, delivering 20% of variance compared with the median return. This was closely followed by linear TV with a variability of 24%. Online video and social media have the most variance in return, with variability returns of 56% and 72% respectively.
BVOD builds incremental reach
PwC’s analysis found that, on average, BVOD adds a 4% increase in incremental Adult (16+) reach to a linear TV campaign, a 6% increase for Adult ABC1s, and an 8% increase for 16-34s.
Among the top performing 10% of campaigns, the % increase rises to 9% for Adults, 8% for Adult ABC1s, and 11% for 16-34s.
One of the main reasons for this incremental reach is the ease of reaching light linear TV viewers on BVOD. The odds of reaching the lightest half of all TV viewing adults on BVOD are one-in-three compared with one-in-13 on linear.
PwC also identified five key BVOD planning tactics that lead to increased total TV reach. These are:
Plan across all three TV sales houses. Light viewers are more likely to be found by spreading your plan across all sales points; Using three sales houses delivers double the incremental reach of a single sales house.
Plan in and around key programming, such as Love Island (ITV), Gogglebox (C4), or high-profile box set dramas like The Midwich Cuckoos (Sky).
Campaigns delivered across 6-10 genres yield up to 3x the incremental reach as compared to those delivered across only 1-5 genres.
BVOD peak time is a longer window than linear (20.00-00.30 compared with linear’s 20.00-23.00).
The BVOD element of TV campaigns should run for longer than 30 days to optimise total TV reach. Campaigns that run for 30-50 days deliver 3 times the incremental reach of campaigns that run for under 30 days.
BVOD is predicted to be one of the fastest growing mediums in 2023
Acacia Avenue’s ethnographic and videographic part of the study revealed that what viewers take from video advertising is affected not only by the creative they see but also by the platform/environment and the device they see it on.
Three key themes emerged:
Worth it vs. Worth Less - Viewers like the predictability of established advertising rhythms and patterns and a fair value exchange in terms of the calibre of production and time spent watching content vs. ads. If that value exchange falls short, viewers will move on or actively avoid the ads.
We vs. Me - Screen size is the main driver of a shared viewing experience. Shared viewing creates talkability and a more immersive, impactful viewing environment. Device-based advertising can be effective when correctly targeted, but the high volume of unknown or smaller brands on social media can negatively affect perceptions.
Resonance vs. Relevance - Ads on a TV screen aren’t scrutinised for their relevance - as long as they resonate with the viewer, they’re accepted. Ads on a device are scrutinised for their personal relevance and are questioned if they fail at this. Randomly placed ads, or ads disguised as content in social media, create mistrust and frustration.
The broadcasters’ VOD services are the original streamers and BVOD is the beating heart of the growing connected TV world. Yet, until now, there has been relatively little large-scale evidence for its effectiveness. This study fills that knowledge gap. It hopefully gives advertisers the proof of BVOD’s effectiveness they need. The overriding finding is that advertisers should invest across linear and BVOD to maximise reach and return.Matt Hill, Thinkbox’s Research and Planning Director
This is the first deep dive into the return that BVOD delivers. From our data it is clear that BVOD delivers a great payback for advertisers. Variability of delivery varies greatly across the video channels and we can see that BVOD has good predictability. Attitude to risk has a bearing on optimal mix and potential short-term return - even more important in tougher economic conditions – and advertisers may be comforted by the predictability BVOD seems to achieve. Our analysis provides many useful insights for the industry into how to optimise AV plans as whole, and BVOD’s role within this.Jane Christian, Mediacom’s Head of Systems Intelligence