Monetising your free Smart TV application
As there are plenty of free Smart TV applications out there, it’s important to figure out the best way to monetise your own. So how do you actually ensure that your application brings in the most amount of revenue?
There’s a lot to account for. Obviously you have to keep the user experience front and centre. Can’t have your users churn because the monetisation options you’ve chosen become annoying, right? In this blog we’re taking a look at some of the monetisation options you can consider, and use to form a combination of options that works best for your use-case and your users.
Standard video ads
The first, and arguably the easiest option to pick is one you’ll recognise: plain old video ads. Of course, they come in many different shapes and forms, and can be implemented with different techniques.
Looking specifically at the form, we can split video ads into three different types: pre-rolls, mid-rolls and post-rolls. As their names suggest, the format of ad used dictates at which moment in the regular video the ad is shown. Pre-rolls are displayed before the regular video starts, mid-rolls are somewhere in the middle, and post-rolls are after the video.
In most cases, you’ll likely use a combination of the three, with most actually going for a combination of just pre- and mid-rolls. The reason post-rolls are used less, is because of the fact that users might simply exit out of the video player after the regular video ends. That obviously means any ad playback that was going to happen, will be stopped. So you’re likely going to be better off using pre- and mid-rolls to get the most effective ad playback.
Keeping users in mind, it’s important to find a balance between the amount of ads and ad breaks, compared to the length of the regular video content. If there is a disbalance, your users are likely to churn and instead find their content on a platform with less ads (or with one they subscribe to). That makes it very important to understand the relation your users have to the amount of ads they get, or the ‘ad-tolerance’ they have. Data is key here.
Video ad technologies
Now that you’ve selected one or two different forms of ads, it’s time to actually implement them. It wouldn’t be the world of tech if there weren’t different options for the same thing. In this it actually makes a lot of sense, as different types of technologies come with different benefits (and also different downsides).
Client-side ad-insertion (CSAI)
The option you’ll find out in the wild the most, is client-side ad-insertion. Also the easiest to implement, and as the name suggests, all of the advertising logic happens on the client (so on the device, in our case the Smart TV). Through the form of so-called VAST (video ad-serving template) and VMAP (video multiple ad playlist) files, the video player gets instructions on when to play ad breaks. As this client-side logic is all that’s needed, its incredibly easy to implement, and very scalable.
As those instructions do happen solely on the device, it makes the ad playback more susceptible to be tampered with. The famous ad blocks are well known, and widely used by many people. The benefit we have with Smart TV, is the fact that easy-to-use plugins are not a thing, making it a whole lot harder to block ads. There are different ways to still achieve the same ad-blocking, but it’s not as easy as on for example a mobile phone or laptop, and requires more technical know-how. Nevertheless, client-side ads are incredibly useful on Smart TV, and the default choice for the majority out there.
Server-side ad-insertion (SSAI)
We’ve covered the client-side ads, let’s move over to its counterpart: server-side ad-insertion. As the name obviously suggests, ads in this case are not simply served from the client, but instead rely on a server to do the signalling. The biggest benefit, as you can probably spot, is the fact that it’s less susceptible to ad blockers. It is still possible in certain ways, but in most cases you can prevent users from blocking, which in the end helps your bottom-line. Regardless, though, with Smart TV being a priority here, the option to block ads is virtually none.
Technology-wise, it is a whole lot different from client-side ad-insertion. Rather than the player having to do the heavy lifting, now the server has to do all the work. In layman's terms, with server-side ad insertion, you’re adjusting your video manifest to signal that an ad has to be played, rather than the regular video segments. As this has a direct impact in the manifest that’s requested by your users, scale can be an important topic to handle. It’s the reason that parties focusing solely on server-side ad-insertion like Yospace exist, although parties like Amazon and Google offer SSAI/DAI capabilities as well.
Server-guided ad-insertion (SGAI)
Lesser-known but growing in popularity, is the third and final technology option in our list. Server-guided ad-insertion claims to be the best of both worlds, where it combines server- and client-side ad properties. What’s different with SGAI is that it has a separate component to handle the ad breaks: an ad-signalling server. This signalling server effectively tells the video player when it should be playing an ad request. The video player then takes those signals, requests the ad break, and places them as regular segments in between your video stream. The folks over at THEO have a good blog, with some nice imagery to explain the workflow:
With SGAI being relatively new, the amount of vendors and player supporting the technology behind it, is still small but growing. In its current form, SGAI relies on so-called HLS Interstitials to handle the actual ad requesting and playback, which is a relatively new part of the HLS spec. As this new spec needs to be adopted in players and the likes, it makes sense that SGAI isn’t used as much as the other ad-technologies yet. In recent months, we’ve seen bigger vendors pick up on using and supporting HLS interstitials for improved ad playback. Because of that, it’s likely this ‘best of both worlds’ ad technology will see a spike in usage in the year ahead.
Pause ads
Also growing in popularity lately, especially since YouTube started shipping this functionality, pause ads are the next level of video (and actually also display) ads. As the name suggests, in this case ads are displayed the moment the user hits the pause button. It’s the latest attempt to try and push more ads to clients, besides the typical pre-, mid- and post-rolls we’ve discussed earlier.
Relying typically on client-side ad-insertion techniques, pause ads are an easy-to-implement opportunity to increase your ad-inventory size. When the user pauses the video, you can simply pass a VAST file to your player and if instructed properly, the ad will immediately start playing. Different from typical video ads, where you would typically require ads to be fully watched, is the fact that you do want to allow your users to continue to watch the regular content immediately. While it does mean the view-through-rate (VTR) will be lower, you’ll still get the benefit of pushing additional ads, without disrupting the user too much.
What’s cool about pause ads, is the fact that you can also use the opportunity to push a different type of ad: display ads. As you won’t know how long the user is going to be pausing the content, and you might rely on high VTRs with typical video ads, display ads might be a better choice for your use case. Simply display a static image, maybe with a QR-code for easy second screen access, and you’re off to the races.
Multiview ads
Deserving specific mention is a type of video and display ads that are displayed in a slightly different way from typical fullscreen ads. With multiview ads you will continue to see the regular video content, while ads are being displayed alongside said regular content. There are different approaches to this:
Different means to providing a similar experience, as you can clearly see from the examples above. You can combine both video ads and display ads together with regular video content, to provide a good ad-experience. Ads are less disruptive to the user yet still maintain a full VTR, as the regular content continues to play. Ads are still noticeable enough, for example with QR-codes, meaning they don’t lose their value. It’s a good middle ground compared to constantly pushing fullscreen video ads, and having very little ads to maintain a balance.
PS. If you want to read more on the examples shown above, you can take a look at the pages from Bitmovin and THEOplayer.
A shopping experience
Lastly, something I’ve seen popping up more these days as well, is a full shopping experience. Especially bigger apps like Youtube and Amazon Prime, that already offer full shopping ecosystems through their parent companies, have started pushing this functionality more as of late. While watching video content, you’ll sometimes see a button popping up called ‘Shop’ (or similar wording). Clicking on this opens a window on the TV that allows you to directly purchase for example merchandise from the series or content-creator you are watching. It opens up additional revenue streams for both series and TV-makers, as well as content-creators.
What’s important to note with this functionality, is the fact that it has a very high barrier to implement. You’ll have to offer full payment functionalities, of course be able to handle refunds, and manage your stock of items. Let alone the fact that the user interface on CTV for shopping can be rather annoying. You don’t want to require the user to enter their shipping address, bank details, and more. So it’s good to either rely on a second-screen application to handle the final purchase, or use the already-known user information to ease the way purchases are being made. As with most, if not all of these integrations currently, they fully rely on a custom app development. It’s not part of any standard ad format, making the entry barrier even bigger.
Here are some pictures from the Youtube app, to show you how they handle the shopping functionality:
Oddball: add subscriptions
But but but… it’s a free application? Yes, I agree, this may sound a bit odd. I’ll try and keep it short then.
Surely you have seen it happening to other apps too, though? Taking a look at Youtube again, they’ve introduced the Youtube Premium subscription. A paid way to watch video content without having to watch any ads. Sure, it may sound weird, but it’s actually being used by many Youtube-watchers, myself being one among them. At some point people value their time more than they value the money they have to spend. And with the strong increase in ad-minutes that Youtube expects per video watched, it made sense, at least for me it did. Granted, it’s a bit of an oddball, but this might also be an option for your use case.
Concluding
In the end, monetising your free Smart TV application is all about finding the right mix. There is no single best solution, but by combining different ad formats, you can create a setup that works best for both your users and your revenue goals. You can start simple with pre-, mid- and post-rolls, and as you continue to gather more data, for example throw pause ads or a multiview experience into the mix.
Important: Ensure to always keep user experience at the forefront. The better you understand your users’ ad tolerance, the easier it’ll be to maximise your monetisation potential without pushing them away. You obviously don’t want your users to churn. So use the data you gather and tweak the way ads are being displayed.
Finally, don’t sleep on newer technologies and ad experiences. Both multiview and SGAI are relatively new ways to monetise your application, so use them to your advantage. And if you really want to take the most out of your content, a shopping experience can be the final experience to implement.
Thanks, I hope this has been useful information for you. If you have any follow-up questions or need some help getting any of this integrated into your app, feel free to reach out on LinkedIn and drop me a message!
