Why FAST Is an Indispensable Pillar in Your Brand’s Investment Portfolio
As we move headlong through this year's TV upfront/newfront season, the TV and video ecosystem seems on the cusp of major change.
First of all, with the multichannel, multi-platform paradigm truly starting to cohere, brands and their agencies are now really looking at sight, sound & motion in a sincerely holistic way. Linear TV and streaming (connected TV/OTT) are now being bought through an integrated lens, if not actually as part of the same package. While voices have become heated regarding TV currency and measurement with the Joint Industry Committee (JIC) fronted by OpenAP and its constituent content companies lobbing grenades back and forth with Nielsen and YouTube, I actually think this is a good thing. Transformation is often contentious and passions rise, but all for the noble cause of making things better.
There is another bubbling trend that is starting to take up more headspace with buyers — the emerging opportunity that is free ad-supported TV advertising (FAST). FAST has reached a household penetration rate of nearly 25 percent, according to Kantar, effectively equaling the rate of subscription-based ad-supported video on demand (AVOD). FAST ad revenues in the U.S. are now projected to grow to exceed $10 billion by 2027, according to Omdia. Why is FAST gaining such traction among both advertisers and consumers?
The Shifting Sands of TV and Video
FAST's upward trajectory is part and parcel of a broader reordering of priorities in TV and video. Much has been made of the "streaming wars" between major SVOD/AVOD players as folks like Disney and Warner Brothers have been engaged in an arms race with Netflix. All three of these players have created business models that combine both subscription only and ad-supported on-ramps to their premium content. It is an expensive battle; those with deep pockets like the aforementioned will be able to afford it while others not so scaled will not be able to afford it.
In a market that's now prioritizing profitability over subscriber count amid macroeconomic headwinds, content companies are recalibrating their strategies and reassessing the viability of hitting initial targets. While brand marketers should certainly continue to grow their positions in premium AVOD, FAST represents a cost-effective platform for portfolio diversification that will deliver scalable ad inventory with value oriented CPMs and a distinct viewer experience.
The FAST Experience Is Unique and Engaging
While we can all acknowledge that cord-cutting in recent years has fueled the rise in streaming at the expense of linear TV, what a lot of folks in our industry haven't distinguished is the ongoing comfort that the lean-back experience of traditional TV has delivered for decades. This is the need that FAST platforms and their programming meet. FAST presents streaming video content in a way that is similar to the traditional linear TV model —ad breaks and all — but with the digital advantages of better targeting and measurement.
Viewers appreciate the lean-back atmosphere and don't feel as inundated by the overwhelming scrolling of choice as they do in SVOD/AVOD. And let's not forget that free TV particularly resonates during a tough economy, especially with many households tapped out on subscription costs. One of FAST's central advantages is its ubiquity of availability. As opposed to traditional broadcast and cable TV, FAST channels are readily accessible on portable devices as well as on Connected TV screens mounted in our living rooms. In fact, 69 percent of TV content viewers in the U.S. use free streaming services according to a 2023 Horowitz Research study.
As more consumers buy new TVs (almost all of which today are connected TVs), more consumers get introduced to FAST. It's what the consumer gets when they click on the LIVE TV button on a connected TV. Consumers have come to love binge viewing – and many FAST channels offer a linear, easy, binge viewing experience with 24/7 programming of a single series. There are many different flavors of FAST programming ranging from the more premium mass-reach programming available on the Tubis and Plutos of the world to more niche, diverse programming platforms with high-quality, highly engaged audiences.
Thus, FAST is an excellent complement to AVOD and will also be a driver for diversity of voice and representation while also driving topline growth for content creators and optimal return-on-ad-spend (ROAS) for advertisers.
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.
Mark Fisher is CEO of OTT.X.