The Most Effective Ways to Monetize Videos

It’s been said many times before–video content is an asset to any organization for a multitude of reasons: higher volumes of website traffic, increase in user engagement, and the like, which makes it a smart investment in any good online strategy. But where does one see a return on that investment? Well, consider the fact that digital video ad revenue reached upwards of $5 billion last year alone. If content is king, monetization is the crown.  Monetizing your videos, when done right, is a lucrative way of bringing in revenue. But its effectiveness can vary depending on your videos and the model you choose for them. The most common monetization models are roll ads, micro-transactions, or subscription services. The end goal is ultimately the same: minimize costs, maximize revenue, and retain viewership.

  • Pre, mid, or post-roll

With roll ads, content is free and available to virtually an unlimited amount of users, so if you’re looking for maximum exposure, this is the way to go. Ads can be tailored to specific viewers based on location, interests, etc., and businesses will pay for access to this audience. But you must demonstrate that you can attract a sizeable audience in a meaningful way—the greater the reach and the higher the likeliness to retain viewership, the more video advertisers are willing to pay for a spot on your content. This is why this kind of ad support is an ideal option for larger-scale broadcasts. It is also perhaps the easiest monetization model to use with a service like VAST.

  • Pre-roll ads are displayed before the video plays and are the most common. Because users have to sit through to access whatever they came to watch, most people are willing to sit through. However, 73% of people take less than 30 seconds to lose interest in a video, so tread cautiously if you’re looking for audience retention.
  • Mid-roll is literally what it sounds like: appearing in the middle of video content. It is less common than its pre and post-roll siblings, but most likely to be viewed to completion (97%–twice as frequently as pre-roll) because the user has already “dedicated” themselves to watching. It’s the model most like traditional TV advertising, which a majority of viewers are already accustomed to.
  • Post-roll: Generally, you might show up for the previews before you watch a movie in theaters, but a lot of the time, people will start packing up before the credits even roll. Post-roll ads, which play after the video, are only watched to completion 45% of the time. Unlike pre-roll, you have no reason to stick around because you’re done watching. Advertisers are less likely to pay for post-roll.

Micro-transactions:

What is this? A transaction for ants? A micro-transaction in the world of video advertising is another way of saying pay-per-view. In most cases, this involves a paywall, so aim to broadcast on a platform that has a paywall option built in! This model is used by many platforms, big and small, from motivational seminars to movie rental services like such as the one offered by Google Play. Your video content is a “product”, which your audience pays a fee to buy. Even if this audience is modest in size, you can generate a large amount of revenue because PPV content generally brings more income with a smaller audience than other options, which makes it a better option for small to medium sized broadcasters. This is especially true if your content fits a particular niche and has a target audience that is willing to pay a premium price on premium content.

Micro-transactions have their own drawbacks. Viewers are only engaged short term with lesser incentive to commit. And because your content isn’t accessible to everyone, you have to invest time and/or money on advertising to attract viewers from the get-go. This poses a greater financial risk than other monetization models, but can be incredibly rewarding if you are confident in your content’s quality, user base, and marketing strategy.

Subscription services:

Many people already subscribe to subscription services, so it seems to work. Pretty well, in fact. Netflix’s DVD subscription service has turned into a multi-billion dollar streaming industry that bankrolls its own productions. Its success lies in the fact that it provides valuable content, long-term, for a long(ish)-term return on investment. The great thing about creating your own subscription service is that there are avariety of ways to do so. You can think of it as serving up a veritable content buffet, annually charging users to get through the door. You can also sell content as a bundle, in which users can pick and choose what kind of premium content they want to pay for access to. Subscriptions create repeat customers, which retains viewership, and it’s convenient for your audience because they know what they want and what they’re getting and they can pay for it all at once.

This model also generates overall greater revenue for content creators and is a steady form of income, granted you have a large enough viewership. But to see consistent growth, you must also create content consistently (the 3 C’s). You might also have to oversee or designate another to oversee customer management if your services are not automated, which can be a hassle. All in all, this is a safe bet if you want a predictable monetization model and have the audience to be able to sustain it.

Verdict:

For minimizing costs: Roll ads

For maximizing revenue: Micro-transactions

For retaining viewership: Subscription services

 

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