Before we explain AVOD, it is important to understand SVOD.

Southeast Michigan small business owners may not be familiar with SVOD, but chances are they let it into their homes and onto their phones.

SVOD is the abbreviation for Subscription Video On Demand. That is the collective name for streaming networks like Netflix, Hulu, Disney+, and Amazon Prime.  For a monthly fee, these services provide commercial-free access to TV shows, original content, and movies.

These SVOD networks are delivered to viewers' phones, tablets, computers, and smart-TVs via the internet and not over-the-air or cable systems.

SVOD makes up a significant part of what advertisers refer to as OTT (Over-The-Top-Television) and CTV (Connected-Television). OTT/CTV is video-programming content that viewers can only watch on smartphones, tablets, computers, smart-TVs, Amazon Firesticks, and Roku Sticks.  Nielsen reports that 91.5% of Metro Detroit adults own at least one of these devices.

There are more than 2,900,000 car radios in Southeast Michigan. On March 23, though, many of these devices became quarantined along with their owners. That was the day when the Governor of Michigan shut down the state to slow the spread of COVID-19.

According to the Apple Mobility Index, the Governor's public-safety order caused traffic on Metro Detroit roadways to plummet to 40% of pre-pandemic levels.

By the beginning of July, however,  the AMI indicates that traffic in Detroit began to exceed pre-Covid levels. The surge in mobility is due, in part, to work-from-home, furloughed, and laid-off employees returning to their workplaces.

According to Nielsen, during the week of April 30, only 39% of adults with jobs were working outside-the-home.  During the week of October 1, though, that number had expanded to 61%.

Now would be a good time for Southeast Michigan small business owners to consider increasing their advertising expenditures.

There are just over 158,000 small businesses in the Detroit-Warren-Dearborn, MI Metro Area metro area, according to the U.S. Census Bureau.  Based on some promising retail sales data, the Overall  Sentiment Index among local small business owners has improved 32.7% between April 26 and October 12 of this year.

The best news for business owners came from the Commerce Department on Friday when it reported that retail sales rose by a seasonally adjusted 1.9% in September.  This is the fifth straight month of gains.

Local retail gains are being powered by improving consumer confidence and a large pool of cash sitting in people's savings accounts.

The Conference Board's Consumer Confidence Index jumped to 101.8 in September, up 17.9% from August. This means consumers are in the mood to spend. Fortunately, they have money in the bank to do so.

Southeast Michigan business owners are expected to spend $79 million on newspaper advertising in 2020. This will be 41% fewer dollars than were spent in 2019, according to a study by Borrell Associates, a company that analyzes local media expenditures across the country.

Of course, the pandemic is part of the reason advertising revenues have plummeted at Metro Detroit newspapers. But, the more significant factor is the sustained erosion of readership.

For example, between January 2018 and March 2019, the Monday-Saturday circulation of the Detroit Free Press has decreased by 34%. The Sunday edition suffered a 28% decrease.

Among all advertising media available to small business owners, newspaper's ability to reach adult consumers now lags significantly behind Detroit radio, cable, broadcast TV, and social media.

Southeast Michigan business owners are forecast to invest $10.6 million in 2020 on email advertising campaigns to market their goods and services, according to Borrell Associates, a company analyzes ad spending by local companies across the country. 

Borrell predicts overall spending on email marketing by Metro Detroit companies is expected to be down by nearly 20% versus last year, primarily due to the pandemic. Regardless, now might be a good time for small business owners to consider engaging current and prospective customers with emails.

"Email is on-fire right now," says Jay Schwedelson, President of Worldata, a company that builds and measures email marketing success for Fortune 100 companies. "Since the start of the pandemic, consumers are spending 22% in their email inbox than they were in January."

Mr. Schwedelson speculates the increase in inbox time is due, in part, to many consumers working from home and depending more-and-more on written communication from co-workers and customers.

"It could also be that consumers are finding comfort in their email boxes rather than from all the noise on social media."

"Either way, email marketing is performing better than ever," says Mr. Schwedelson. "We've studied more than 200 million emails sent over the past 30 days to both business-to-consumer and business-to-business. We found that B2C open rates are up 16% since January, while B2B open rates are 25% higher."

There are over 3.5 million adult consumers in the Detroit area. Collectively, in a typical year, these shoppers would generate $78.3 billion in retail sales. This money would be spent on cars, shoes, fast-food, entertainment, groceries, mattresses, adult beverages, haircuts, makeup, and an over-abundance of other of goods and services. Their money was being spent on both the essential and the frivolous. 

The way Southeast Michigan consumers spend money changed radically in March as COVID-19 began to spread. Six months into the pandemic, shopping strategies are about to change again.

It started with panic buying. Consumers began ignoring prices and were paying what was ever necessary to ensure the safety, health, and comfort of their families.  According to Nielsen, this sudden spike in demand caused widespread price increases. To put it in perspective, retail prices shot-up in 64% of all product categories stocked in grocery stores.

Almost immediately, advertising messages from local retailers shifted from promises of low prices and convenience to product availability and shopper safety.

Based on new research from Nielsen, consumers' shopping strategies are beginning to shift again. This will require Metro Detroit small business owners and retailers to also change their advertising strategies, too.

Southeast Michigan shoppers are expected to spend over $15.9 billion during this year's November-January holiday season. This estimate is based on a forecast issued last week by Deloitte, the world's largest business accounting firm.  This spending represents a 1-1.5% increase  versus the same period last year.

How can Metro Detroit small business owners best compete for a significant share of the 2020 holiday expenditures?

"Retailers who prioritize customers’ desires for a safe, efficient shopping journey will be the big winners this year," writes Sean Gundz on www.ChainstoreAge.com.

"The holiday season is always a stressful time for retailers, especially the ones that make the majority of their revenue in the short window between Thanksgiving and Christmas," says Mr. Gundz. 

"Within this window is Black Friday, which, along with other big holiday sales events, are going to look a lot different this year. Retailers must accommodate COVID-19 mandates that enable social distancing, minimize surface touching, and actually restrict foot traffic in their facilities. All while trying to optimize sales."

Mr. Gundz says there is no single way to deal with the challenges facing retailers this holiday season. He does offer five tips, though, that every Detroit retailer can employ.

Southeast Michigan consumers are expected to spend $117 million on Halloween related activities in 2020, according to information from the National Retail Federation.  This would be a slight 2.3% decrease from 2019. This is proof of the holiday's strong resistance to the pressures of a pandemic economy.

Based on data from the NRF's annual survey conducted by Prosper Insights & Analytics, more than 2.1 million Metro Detroit adults plan to participate in Halloween-related activities. Among those celebrants, safe at-home activities ranked highest: 53 percent plan to decorate their homes, 46 percent plan to carve a pumpkin, and 18 percent will dress up their pet.

“Consumers continue to place importance on celebrating our traditional holidays, even if by untraditional standards,” NRF President and CEO Matthew Shay said. “Retailers are prepared to meet the increased demand for seasonal décor, costumes, and other items that allow families the opportunity to observe Halloween safely.”

To earn a large share of Halloween spending in 2020, Detroit small business owner will need to advertise to let consumers know their stores are open, stocked, and ready. By any metric, advertising on Detroit radio is the best way to reach holiday shoppers.

There are more than 2,900,000 vehicles registered in Southeast Michigan. Many need new windshield wipers, shocks, struts, brakes, air filters, ignition coils, and the hundreds of other items that fill the shelves of local auto part dealers.

Despite the pandemic induced slowdown, business at auto parts stores has grown nearly 13% since February, according to the US Census Bureau.

This explosive growth in auto parts sales directly relates to the  average age of cars on Detroit's roads.

"Per the latest study from IHS Markit, the current combined average age of vehicles has hit a record of 11.9 years," Rimmi Singhi wrote this week on NASDAQ.com. "The aging vehicles are a boon to auto parts, replacement, and repair companies. In a bid to ensure long-term functioning of the aging vehicle population, customers are making investments to replace faulty vehicle parts and components."

Also contributing to the rapid aging of cars on the road is the current demand for used versus new vehicles. According to the Bureau of Economic Analysis, the personal consumption expenditures (PCE) for used cars is 25% higher in August than it was during the same month last year.

There are approximately 526,000 households in Southeast MIchigan with existing mortgages, according to the US Census Bureau, American Housing Survey. The median amount owed on these homes is $115,000.

Yesterday, there was extraordinary news for many of these borrowers and for Detroit area banks, credit unions, and mortgage companies

According to The Federal Home Loan Mortgage Corporation (Freddie Mac), mortgage rates have hit an all-time low of 2.86%.