As expected, AT&T has formally begun selling ads to SVOD, on-demand VOD and DVR users in an effort to mine incremental revenue from the burgeoning over-the-top video market.
Xandr, AT&T’s advertising company, Jan. 8 announced the launch of Pause Ads, which it claims “complement,” rather than disrupt, the viewing experience by leveraging the native functionality of the “pause” button, since consumers only see the ads when they take a break from the content they’re watching.
AT&T launched Xandr in September 2018 following the acquisition of AppNexus.
“Our findings indicate that consumers aren’t anti-advertising. They’re pro-content, as long as it’s relevant and non-disruptive to them,” Matt Van Houten, SVP of product development for Xandr, said in a statement.
Van Houten said internal research found that 73% of consumers surveyed dislike ads that interrupted programming. But an ad that appears when the viewer hits the pause button is different.
“[It’s] very much about the right message at the right time,” he said.
Pause Ads are enabled within live, video on-demand and DVR programming across cable, broadcast and premium networks on both digital and satellite. AT&T is including beta ads within mobility, Epix and Starz (owned by MGM and Lionsgate, respectively), AT&T TV Now and select DirecTV households.
Because Pause Ads aren’t tied to standard, 15 or 30-second pods, brands have more opportunities to reach their audiences with relevant advertising in a non-intrusive way, according to AT&T. Beta ads are featured in animated formats without sound that are intended to be “visually engaging,” while remaining “respectful” of the viewer.
Indeed, Disney-owned Hulu has begun testing pause ads this year and shown a positive response from viewers, according to Jeremy Helfand, VP and head of advertising platforms.
“As binge-viewing happens more and more, it’s natural [viewers] are going to want to pause,” Helfand said in a separate media interview.
AT&T, citing internal research, found 66% of consumers want ads that are more relevant to their interests and lifestyle, and that 57% feel ads are not relevant to them.
Citing increased concerns about SVOD fee fatigue among consumers, Brian Lesser, CEO of Xandr, contends the OTT world needs advertising “more than ever” to offset subscription pricing.
“We just need to make it more relevant,” he said.