VOD Advertising

VOD advertising is increasingly popular. As our TV viewing habits change, broadcaster video-on-demand (VOD) advertising is becoming a large and credible TV advertising option

What is VOD?

Video-on demand, known as VOD, is any video which is initiated by the viewer and streamed via the internet (thereby viewed on a ‘one-to-one’ basis) as opposed to being viewed in a broadcast (ie ‘one-to-many’) basis.

In the UK television advertising market, VOD most commonly refers to on-demand TV from broadcasters watched as catch-up or archived in an app or through a set top box. Broadcast VOD can be watched on any one of these platforms; ITV Hub, All4, Sky on demand, UKTV Play, and My5.

At a glance

  • TV VOD advertising lets you advertise against more specific audiences than linear TV advertising
  • In the UK market, the main providers of 'broadcast VOD' advertising are ITV, Channel 4, Channel 5, UKTV and Sky
  • VOD advertising can be used on a standalone basis to target lighter TV viewers, and is a good complement to a broader TV campaign
  • VOD advertising is more expensive on a cost per thousand basis than linear TV but lets you target a more defined audience

Why should I advertise on VOD?

For many advertisers VOD is seen as a ‘cheaper’ way to advertise on TV. This is because the advertiser is looking to target a smaller more tightly defined group of consumers, and therefore can be more focused & efficient than they could on linear TV. Be aware that although this means an advertiser would need significantly less money to build an effective VOD campaign, they would actually be paying more per consumer reached. Therefore, advertisers should have a very clear understanding of their target audience, otherwise they might as well advertise on linear TV at a lower ‘Cost Per Thousand’, and accept the broader targeting (or wastage) that comes with TV.

VOD advertising, broadcast TV advertising - or both?

The big UK TV advertisers tend to use VOD to reach lighter TV viewers who are harder to reach using a standard TV laydown. These audiences tend to be younger, more upmarket and more urban, so are also more costly to acquire on linear TV. So in this scenario VOD is complementary to linear TV.

A second reason advertisers use VOD is the targeting capability. If you have a good understanding of who your audiences are, you can use VOD more cost effectively than perhaps via linear TV. The big four broadcasters’ VOD sales houses have varying levels of targeting capability, so depending on your circumstances one or more of them could serve your objectives. Let’s say a large household stock cube brand might advertise significantly on linear TV throughout the year. They might use VOD to reach light TV buyers, but they might also have a premium version of their stock cube that they want to get into the baskets of high earning foodies. Rather than buying ABC1 Adults on linear TV, you could seek to reach households who earn over £50k, who live in the South East and shop at Waitrose. The four VOD suppliers would build an audience using their respective data layers to ensure that only those people see your ad. More importantly it is here that VOD can offer interactivity, so you could overlay recipe ideas, or have a call to action to receive a free sample. You can have this capability for those who are not viewing VOD on a big screen.

What are the difference between the different VOD providers?

There are multiple differences, and just to confuse things the five main ways of advertising on VOD are sold by just three of the main broadcasters: ITV, Channel 4 and Sky.

ITV

ITV logo VOD | TV Advertising.co.uk

Channels represented
ITV1, ITV2, ITVBe, ITV3, ITV4 and CITV

No. of Registered users
29 million registered users

USP
1 impression = 1.6 dual viewed big screen impressions (Thinkbox)

Targeting capability
Three targeting approaches available including an addressable-lite solution

Costs
Average CPM = £35-£55

Channel 4

Channel 4 logo VOD | TV Advertising.co.uk

Channels represented

E4, E4, More4, Film4, UKTV (Dave, Yesterday,Dram, Alibi,Eden, Gold, W)

No. of Registered users
18.5 million registered users

USP
Demo/context/interest lookalike modelling

Targeting capability
Postcode area targeting capability

Costs
Average CPM = £30-£40

Sky

Sky TV logo VOD | TV Advertising.co.uk

Channels represented

All Sky channels + Channel5,5USA, 5Star,

No. of Registered users
SkyQ in 5.5m homes

USP
Big Screen & Clickable buying routes

Targeting capability
Regional targeting possible, but advised to be used in tandem with AdSmart

Costs
Average CPM = £26-£50

Sky are proud to claim that 80% of their VOD viewing is on the big screen. This is mainly down to the fact most viewers access Sky VOD via their SkyQ box. Therefore, this becomes a VOD buy that is more likened to the standard linear TV viewing experience

However, this can be flipped as a negative. Since if you want to reach Sky homes on the big screen you might be better off buying a more superior addressable product such as Sky AdSmart.

How much does TV VOD advertising in the UK cost?

The VOD advertiser is essentially buying viewers, so the cost comes down to how many viewers the advertiser is willing to pay for. The other consideration is how much the advertiser is willing to pay to reach each viewer. A good shorthand is that a basic adult VOD buy is £35 CPM (compared to say an average £10 on linear TV). This means to reach one VOD viewer costs 3.5p and to reach one TV viewer costs 1p. So again, this comes down to the advertisers understanding of how effective it is to reach a more tightly defined VOD viewer versus a broader TV viewer audience.

How can I buy VOD advertising?

As with all briefs our team will give you a one to one service by responding to your brief over email, on the phone or in person. We can discuss the merits of VOD and linear TV advertising and quickly come back with a media plan. If you were happy to go ahead we could book that plan within 3 days of the live date once cleared funds have reached us.

Interested in VOD advertising?

Let our team get you started with VOD advertising.

Call us on 0800 133 7104 or contact us and we’ll get right back to you.

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