How to Generate Revenue by Advertising?

Revenue by Advertising

The video streaming industry is growing and developing. Companies and organizations get involved in the game by launching their streaming services and generating revenue by creating engaging content. 

Suppose you want to create a streaming service. You also want to capitalize on producing videos, or you want your channel to stream third-party content. Now, it doesn’t matter what content you offer to your viewers. 

One of the most crucial things to consider before the launch is a pricing model. How will you generate revenue? Will you opt for a subscription-based approach, a pay-per-view, or advertisements? Whatever model you choose, it is vital to learn more about it in the first place. In this article, we observe an advertising-based monetization model. 

What is Ad-based Monetization?

The ad-based monetization model refers to showing video commercials to viewers and generating revenue from that. Usually, video streaming services that choose ads for monetization allow people to watch videos for free. But that’s not the rule. 

Ad-based streaming services let advertisers display commercials to their audience. It is a win-win since viewers don’t pay anything for watching videos, content providers get paid by advertisers, and advertisers reach their target audience.

Compared to the ad-based monetization approach, subscription-based video streaming services don’t utilize ads. They charge a monthly or yearly fee for access to all videos on the platform. Pay-per-view services sell access to each video separately.

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Ad-based Strategies

Advertising-based video-on-demand

One of the best ways content providers can monetize their videos with ads is AVOD monetization. It refers to advertising-based video-on-demand.

As a content provider, you don’t charge viewers for watching content but capitalize on running ads. People don’t mind watching advertisements during video playback in exchange for free content.

Hybrid video-on-demand

You can use only ads for generating revenue or combine them with another monetization model we mentioned earlier. There are the following examples of such combinations:

  • Viewers have two options: pay for an ad-based subscription at a lower price or a higher price for ad-free content. This is a monetization model that Netflix has recently adopted. 
  • Viewers also have two options: watch free content with ads or remove commercials by paying for a subscription. 
  • Viewers cannot remove ads. You provide a subscription with ads. 

Free Ad-Supported Streaming Television

FAST services deliver ad-supported channels with fixed scheduled programming in real-time. Viewers only need an internet connection to stream movies and shows from traditional broadcasts.

OTT Advertising Best Practices 

Let’s share essential things to help you make the most of your ad-supported streaming service.

Know your audience

Since solutions for video streaming can help you target ads to people who might be really interested in it, it is better to use this feature. For this, you need to understand your audience or segment your viewers, which is even better.

You will be able to understand their demographics, interests, preferences, location, and many other things. Having this information can help you stop spending resources on showing ads to people who are not interested in the product or service advertised. For example, a 15-year-old boy’s needs and interests differ from those of a 30-year-old woman. As a result, it is better to show them different commercials. 

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Opt for intelligent ad insertion

It is also important to think about the way ads are inserted into the video playback. In the OTT streaming market, two approaches are widespread:

  • Server-side ad insertion (SSAI) does all manipulations on the server side. As a result, an ad and a video are stitched together, and ad blockers cannot detect a commercial. 
  • Client-side ad insertion (CSAI) delivers ads straight to devices, and the insertion happens on the client side. 

SSAI can be more costly than CSAI but also more profitable. It can bring more impressions and be effective against ad blockers. It means that your revenue is saved. 

Choose partners wisely

Plenty of businesses and organizations may contact you to partner with and place their commercials on your video streaming service. Don’t rush into partnerships.

It is better to take some time to get to know people you are considering for cooperation. Learn their product and check if it is of high quality. You can even ask for their former customers to reach out. Do anything to make sure that you are making the right choice.

Drawing the Line

The popularity of ad-supported streaming services is growing thanks to the demand among viewers. For this reason, companies and organizations create their ad-based services or add additional ad-based tiers. It can be a profitable monetization model for your video streaming business. Consider everything thoroughly before making a decision. 


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