Video on Demand Services Are Driving Tremendous Growth

Wesley MacLaggan

October 5, 2018

The popularity of Video on Demand (VOD) streaming services is driving tremendous growth and the space just keeps getting hotter. Digital advertisers can learn a lot from how VOD providers have managed to scale their audience with varying degrees of success.

A recent ONS survey shows that close to half of all adults said they had watched Netflix, Now TV, Amazon Prime Video or a similar internet-based service over the past three months. It’s clear that more people are moving away from traditional TV services, preferring to watch their content via online services.

With over 8.5 million registered users in the UK, Netflix leads the overall VOD market. Amazon comes in second with 4.3 million users. There are also a number of other smaller VOD players that are fast on their heels, such as Now TV, Hulu and DirecTV.

The Challenge

The VOD market is huge and highly competitive. Like most digital advertisers, attracting new customers to specific platforms is the ultimate goal of VOD providers, but just as important is attracting existing customers from competitor providers. To ensure customers are retained and new ones subscribe, VOD providers need to implement intuitive and targeted marketing campaigns. The ultimate goal is to attract new customers while driving consumer engagement and loyalty with a stellar user experience.

One of the primary reasons behind Netflix’s success stems from its innovative marketing strategy. So what is Netflix doing that the other providers aren’t? And how can others follow their lead?

We have put together some top tips for VOD providers (and advertisers, in general) to ensure they stay ahead of the curve, and importantly, competitors:

Make the Most of your Search Marketing

From a search marketing perspective, Netflix rules the roost in terms of having a keyword strategy that drives traffic. This represents a huge missed opportunity for other providers from a search perspective. Bidding on relevant Netflix organic keywords can give others the opportunity to scale, test new keywords and potentially discover new audiences who are showing strong intent to stream, rent, buy or subscribe to a VOD service.

Adopt a Mobile-First Strategy

In today’s digital age, it’s all about mobile. According to the Internet Advertising Bureau, advertising via mobile now makes up 43% of the total digital ad spend, and mobile is driving almost all the growth in the UK market.

With this in mind, many brands are adopting a mobile-first strategy. When it comes to the VOD space, the big players such as Amazon and Netflix are failing to allocate enough spend to this vital channel causing them to fall behind other providers. For example, Hulu and DirecTV have a higher traffic share coming from mobile.

This mobile-first trend continues to accelerate, so pumping more spend into mobile should be the focus of any marketing strategy for VOD providers.

Leverage Dynamic Ads

To stay competitive in the VOD space, it’s vital to show relevant content to users and keep them engaged. Giving customers a more relevant ad copy, updated with the latest titles and collections, and ensuring that non-original content is displayed with relevant pricing is an excellent way to keep them happy.

Dynamic ads are the easiest way to find customers searching online at scale — they are ideal for brands with a website, which holds a large inventory. Adopting dynamic ads will allow Amazon, for example, to go beyond keyword targeted campaigns and ensure they can capture audiences that are interested in Prime Video content, regardless of keyword coverage.

Leverage First-Party Data to Synergize Paid Search and Digital

Amazon has an enormous existing customer base at its fingertips through other branches of its business. By adjusting bidding, existing customers can be targeted to cross-sell and up-sell additional services, including Prime Video content based on their past interests and products bought directly from Amazon. With millions of customers using other Amazon products and a wealth of first-party data inside Amazon’s platform, we see this as a huge growth opportunity.

For example, behavior and usage data from Prime Video members can be uploaded to enrich Google campaigns via custom match.

Staying Ahead of the Pack

As we move further into 2018, I expect providers such as Hulu, DirecTV and Now TV to try everything possible to close the gap between the two big providers. Combining a strong marketing strategy and quality user experience will help Amazon and Netflix stay on top of the market.

Wesley MacLaggan

Wesley MacLaggan has been working with Marin Software since 2008. He is currently Senior Vice President of Marketing at Marin Software. Previously he led the Product team where he was responsible for driving Marin’s roadmap and working closely with engineering to deliver innovative advertising solutions to the market. He has over a decade’s experience developing and delivering analytical enterprise SaaS applications, including four years with Applied Predictive Technologies working on their platform to help retailers maximize the return on their promotional spending. Mr. MacLaggan began his career providing strategic guidance to companies in a range of industries with Mercer Management Consulting. He holds an Economics degree from Dartmouth College.