In the fiercely competitive streaming market, viewer churn is a constant threat. By late 2023, OTT services saw churn rates spike to an all-time high of about 50% in a single quarter. Advertising-based Video on Demand (AVOD) platforms are not immune to this challenge.
In AVOD monetization model, where revenue depends on ad impressions, losing viewers directly means losing income. Reducing churn in AVOD services comes down to keeping viewers engaged and satisfied, and the key to doing that lies in understanding engagement metrics.
Why Churn Matters
Unlike SVOD services, where churn means canceling a paid subscription, churn in AVOD often happens silently – users simply stop coming back. This is just as harmful because fewer active users mean fewer ads watched and lower revenue. In the AVOD model, every additional minute a viewer spends on the platform is an opportunity to serve ads and generate revenue. High churn, on the other hand, can erode the audience base needed for advertisers to find value in your platform.
A poor user experience is one of the top reasons viewers abandon a platform. For example, excessive buffering, app crashes, or even overly intrusive ads can frustrate users.
In short, engagement is the lifeblood of AVOD monetization by maintaining a loyal, active user base, ensuring a steady stream of ad views, and keeping the service profitable. AVOD providers must therefore optimize content, advertising, and user experience to retain a viable audience segment.
Key Engagement Metrics to Watch
Certain user metrics act as early warning signs of churn. Monitoring these closely can tell OTT operators a lot about viewer satisfaction and potential exit points. Here are some crucial engagement metrics for AVOD services:
- Average Session Length: A healthy average session length suggests viewers are finding enough content to stay engaged. If this metric starts shrinking, it may indicate waning interest or that users aren’t finding desirable content. Longer watch times not only mean higher engagement but also more ad impressions per user session.
- Content Completion Rate: whether viewers finish the videos they start. A low completion rate (e.g., many viewers drop out halfway through a show or right when an ad plays) can signal dissatisfaction. It might point to problems like unengaging content or poorly timed ad breaks.
- Active User Retention: metrics like Daily Active Users (DAU), Monthly Active Users (MAU), and the ratio between them (stickiness) reveal how frequently people return. If monthly users aren’t coming back daily or weekly, they might be losing interest. A declining DAU/MAU ratio or a slide in repeat visits is often a red flag for churn risk.
- Ad Engagement and Tolerance – In AVOD, it’s important to measure how users interact with ads. Metrics such as the percentage of ads watched to completion, skip rates, or user drop-off during ad breaks can tell you if the ad load is too high or the ads are poorly targeted. A sharp rise in users leaving immediately after an ad starts is a sign that ad experiences need improvement. When done wrong, ads can disrupt the user experience, potentially leading to a drop in viewership and even churn.
- Quality of Experience (QoE) Metrics: Technical performance indicators like buffering frequency, video start-up time, and crash rates are engagement metrics too. If viewers encounter buffering or low video quality, they are less likely to stick around. High buffer ratios or error rates correlate with users giving up on content.
By keeping an eye on these metrics, AVOD operators can measure user engagement and spot trouble early.
Conclusion
The good news is that today’s analytics capabilities make it possible to understand viewer engagement in real time and at a granular level. From adjusting your ad strategy to personalizing content to fixing technical pain points, the insights hidden in engagement metrics empower AVOD operators to build loyalty and reduce churn. The result is a win-win: viewers get a platform that feels tuned to their interests and needs, and the service reaps the rewards of sustained viewership and healthier ad revenues in the long run.
