Definition
Ad-Supported Video on Demand (AVOD) is a video distribution model that allows users to stream content for free or at a reduced cost, with advertisements shown before, during, or after the video content. Unlike subscription-based services, AVOD monetizes content through advertising revenue rather than user fees. Examples of AVOD platforms include YouTube, Tubi, Pluto TV, and Freevee.
How it relates to marketing
AVOD represents a significant opportunity for marketers to reach highly engaged audiences within premium or long-form video content environments without the cost and commitment of traditional television. AVOD platforms combine the broad reach of television with digital advertising’s precision, enabling audience targeting, frequency capping, and performance tracking. It is especially relevant in media planning strategies aimed at cost-effective awareness, brand lift, and conversion-driven outcomes.
How to calculate AVOD advertising metrics
AVOD campaign performance is typically measured using digital video metrics. Key calculations include:
- Impressions = Number of times an ad was served on AVOD content.
- Video Completion Rate (VCR) = (Number of completed views ÷ Number of started views) × 100
- Click-Through Rate (CTR) = (Number of clicks ÷ Number of impressions) × 100
- Cost Per Thousand Impressions (CPM) = (Total ad spend ÷ Impressions) × 1,000
- Cost Per Completed View (CPCV) = (Total ad spend ÷ Completed views)
- Viewability Rate = (Viewable impressions ÷ Total measurable impressions) × 100
- Incremental Reach = Unique viewers reached on AVOD platforms who were not reached by linear TV or other channels
How to utilize AVOD
Marketers use AVOD to achieve a range of goals, from awareness to direct response. Common use cases include:
- Extending reach beyond linear TV to cord-cutters and cord-nevers.
- Targeting specific audience segments using behavioral, demographic, or contextual signals.
- Retargeting based on site visits, app activity, or previous ad exposures.
- Launching cost-effective video campaigns with smaller budgets compared to premium SVOD or CTV inventory.
- Testing creative performance in a controlled, measurable environment.
- Driving app downloads, site visits, or purchases through clickable CTAs or companion banners.
Compare to similar approaches
| Feature | AVOD | SVOD | TVOD | Linear TV |
|---|---|---|---|---|
| Cost to Consumer | Free or low cost with ads | Subscription fee, no ads (mostly) | Pay-per-view or rental fee | Included with cable/satellite plan |
| Revenue Model | Advertising | Subscription | Transaction | Advertising (broad) |
| Ad Targeting Capabilities | Digital-level targeting | Limited or no ads | Minimal to none | Basic demographic/geographic |
| Content Access | On demand | On demand | On demand | Scheduled |
| Measurement | Digital (impressions, VCR, CTR) | Internal metrics only | Transaction-based | Panel-based, GRPs |
Best practices
- Use dynamic creative optimization (DCO) to tailor ads based on audience segments or context.
- Invest in high-impact ad formats such as pre-roll, mid-roll, or interactive video.
- Cap ad frequency to avoid viewer fatigue and enhance user experience.
- Ensure ads meet platform-specific specs (length, format, bitrate).
- Layer first- and third-party data for precise audience targeting.
- Combine with CTV buys for unified video strategies and cross-screen attribution.
Future trends
- Hybrid monetization models are emerging, combining AVOD with SVOD (e.g., Netflix’s ad tier).
- Increased content investment by AVOD platforms is elevating quality and competitiveness.
- AI-driven ad placements are improving personalization and relevance.
- Expansion of FAST channels (Free Ad-Supported Streaming TV) within AVOD ecosystems.
- Greater integration with commerce and shoppable video experiences will enable direct conversions from video ads.
- Privacy regulations may shift targeting strategies toward contextual and cohort-based approaches.
Related Terms
- Connected TV (CTV)
- Over-the-Top (OTT)
- Subscription Video on Demand (SVOD)
- Transactional Video on Demand (TVOD)
- Programmatic Advertising
- Video Completion Rate (VCR)
- Demand-Side Platform (DSP)
- Frequency Capping
- Dynamic Creative Optimization (DCO)
- Free Ad-Supported Streaming TV (FAST)