The Undiscovered Country: How ads perform in Video On Demand programs
Television as medium has moved beyond fragmentation, into granularity, as programs are being carried on new platforms such as mobile, the Internet, and Video On Demand. VOD viewership has been growing at double digit rates, with the largest portion of growth coming from "traditional" TV programs being placed by TV networks. However, there has been little understanding of how commercials perform in VOD.
The value of advertising time in VOD is immense, given that viewers have to be actively engaged to select the programs. VOD advertising is often structured with the first position, "the pre-roll," starting before the program content. Rentrak, through its analysis, has shown that the "pre-roll" has a very high value. The original research Rentrak has done shows much higher indices for ad viewership in the pre-roll position. The metric employed was the Ad Retention Index, which is the average audience during commercial minutes on VOD divided by the entire program's average audience (including ad minutes). The ARI is a concept similar to the C3 on linear TV. The pre-roll ARI for regular duration programs was a 122, and the average pre-roll short duration program was a 129. This high value of audience for pre-roll gives advertisers a unique opportunity to connect with engaged viewers.