Viewer “Rabbit Holes” Are an Untapped Goldmine for Brands
In the same way that short-form content on platforms like YouTube captivated users over a decade ago, free ad-supported television (FAST) channels can lead their viewers down even deeper rabbit holes with long form content. The ability for FAST channels to truly engage audiences and take them on a journey makes ad-supported streaming an increasingly efficient way for advertisers to reach audiences, at scale and in a contextual and targeted way.
In fact, the opportunities for marketers and content owners to first capture and retain viewers have never been greater. But to truly strike the goldmine of possibilities that exists within ad-supported streaming, content platforms and advertisers alike must be willing to explore a broader spectrum of monetization options.
Below are several ways in which advertisers can capitalize on the benefits that FAST channels offer.
The Unrivaled Evolution of FAST: Where It's Been, Where It's Headed
FAST services deliver real-time streaming of channel-based linear content. Since 2020, FAST has continued to transcend expectations, defying our previous collective obsession with on-demand, commercial-free and subscription-based content, and giving way to the rise of linear, passive, and ad-supported channels (with major players such as Pluto and Tubi). SVOD is making way for AVOD. Notably, the major subscription platforms (Disney+ and Netflix) are now offering lower-priced ad-supported options.
As FAST services continue to experience explosive growth that is now outpacing subscription models and become more attractive to consumers who wish to minimize entertainment costs in a tight economy, there's never been a better time for advertisers to prioritize FAST in their marketing budgets. Consider the following recent statistics:
- More than 1,500 FAST channels are already available in the U.S., with global revenue set to triple between 2022 and 2027 (to the tune of $12 billion, according to Omdia).
- The adoption of AVOD and FAST grew faster compared to SVOD (55 percent versus 28 percent, according to Digital Content Next).
FAST has become a growth strategy for content providers in offering low-cost options that are attractive to more viewers. From a technical standpoint, FAST platforms are low-risk and relatively simple to create for content owners and video service providers. They do not have channel or format limitations, are cloud-native, nimble, and capital-efficient. There is a growing underserved market of consumers who demand more personalized, compelling video content but have hit their threshold on another subscription service.
FAST as a Potential Effective Vessel for Contextual Targeting
Contextual targeting removes the ongoing privacy concerns associated around device IDs and IP addresses, allowing advertisers to reach a wider audience and identify shows based on tags and universal category IDs. In a similar vein, brands won't have to worry about reaching an audience that is too narrow; they're able to choose where ads run based on the show's format.
All of this is not to say that demo-based targeting isn't effective. While contextual targeting is fitting for large brands who view TV as more of a vehicle for higher reach, such as Iris.tv, demo-based targeting is well-suited for D2C brands who rely on advertising for branding purposes. As FAST advertising evolves, it would be advantageous for brands to start exploring the possibilities of combining demographic and contextual advertising strategies.
Personalizing FAST Channels to Maximize Audience Reach and Engagement
In today's streaming landscape, personalization at every stage of the user journey is paramount. FAST platforms now have a big opportunity to roll out new tiers that will offer viewers a more personalized experience in exchange for data capture, with low effort and minimal investment.
For the content provider, personalization is a new opportunity to optimize engagement, monetize viewership, and have lower viewer turnover. The data collected on viewer preferences and habits allows FAST channels to provide progressively more relevant content. The more engaged a viewer is, the higher the retention, and the more effective advertising. For the consumer, personalized virtual channels provide a hassle-free navigation experience, helping them avoid decision paralysis, while improving upon individual content preferences.
Furthermore, personalized virtual channels extend and maximize content shelf life. Reusing existing content libraries can also help offset encoding and content acquisition expenses.
Targeting and Attracting Gen Z and Millennial Viewers on FAST
With the number of monthly gen Z CTV users expected to rise from 50 million in the U.S. in 2022 to about 56 million by 2025 (via Statista), new research from Morning Consult in partnership with Variety Intelligence Platform suggests that gen Z adults and millennials are more likely than older peers to adjust (or outright cancel) their video entertainment subscriptions due to inflation and subscription fatigue.
And, while FAST channels have a smaller number of gen Z audiences right now, it's anticipated that they will attract these viewers by creating original content, rather than streaming legacy sitcoms and traditional programming. According to market research firm Horowitz, 8 out of 10 gen Z respondents say they stream TV content at least weekly, with less than half (45 percent) watching via cable or satellite.
Millennials are frequent users of the top FAST platforms, viewing them several times per week according to the latest Morning Consult survey. Millennials also represent the generation with significant spending power, as well as the largest cohort of parents. There's a massive opportunity for children's brands to reach target audiences through FAST networks. Furthermore, integrating FAST into an advertiser's marketing spend allows them to maximize "unduplicated audiences."
For instance, Morning Consult recently found that consumers who don't subscribe to any video streaming service reported having used one at least once in July 2022, with 12 percent using Tubi, and 15 percent using Pluto TV. This presents an enormous opportunity for marketers who wish to target viewers that fall outside of their typical reach.
With key audience demographics expected to continue growing on the horizon, attracting, and maintaining eyeballs through FAST is a new opportunity for advertisers to gain some extra exposure. History is seeming to repeat itself as viewers return to ad-supported content and veer away from the uninterrupted streamable format that's dominated the TV landscape in the last few years. To extract the most value out of the FAST environment, advertisers and content companies need to continue to innovate, fully explore ways to engage, understand and create ongoing relationships with consumers.
The views and opinions expressed are solely those of the contributor and do not necessarily reflect the official position of the ANA or imply endorsement from the ANA.
Greg Smith is GM of North America at Aniview.