Hot Takes: The Booming FAST Ecosystem

FASTs (Free Ad-Supported Streaming TV Services) a term invented at TVREV, are becoming a major force in the television industry, especially as brands seek to shift ad-dollars to CTV.

Last week we showcased Evan Shapiro’s map of the FAST ecosystem, this week we announced that FASTs would be the subject of a new series of TVREV reports, and today we are presenting thoughts from our Thought Leaders Circle members about FASTs and what they are focused on. It’s a wide range of opinion, thoughtful and sometimes provocative, so enjoy.

Bob Ivins, Chief Strategy Officer at TVSquared reminds us that regardless of business model, it is all still TV and needs to be measured and reported as such. Editorializing here, but this is such an important point as many agencies, brands and analysts still lump streaming TV in with “digital” or “digital video” despite the fact that consumers see it as “TV.”

As an industry, we need to simplify. One place to start is to move past the confusion that unnecessary acronyms (e.g. CTV, OTT, AVOD, SVOD, etc.) cause. It's all TV – full stop.  It is professionally produced, brand-safe programming, distributed across platforms, to any device. Leaning too heavily on an acronym (or even using the term "digital") is slowing our progress. Programmers will continue to develop and distribute high-quality shows, and advertisers will want to be in and around them, but as TV continues to develop more sophisticated targeting, measurement and attribution capabilities, classifying this programming by a new acronym is causing confusion.Let’s simply call it TV and use consistent metrics to measure and report—regardless of the format, the distribution or the device.  

Additionally, with TV's expansion across platforms and screens, free, ad-supported TV services are empowering advertisers to reach and engage with audiences they never would be able to through linear alone. These newer platforms also provide advertisers with heightened targeting capabilities and the ability to experiment with various ad formats (e.g. interactive ads).

Nick Cicero, Vice President, Strategy at Conviva focused on the need for data transparency in a medium that allows for far more data than traditional TV, something he notes is as important from programmers as it is for advertisers.

As more FAST channels emerge, competition in the market for viewership will continue to be fierce. Outside of the obvious play for the best content, data transparency and collaboration are two key themes that will be important in driving consumers to a FAST offering. 

Technology allows us to understand audiences, target messaging, curate content, and ultimately, respect the user experience. When content, advertising, and consumer are all measured continuously, context becomes a powerful form of personalization to drive acquisition, retention, and loyalty.

Within the FAST ecosystem, there’s a relationship between content owners and platforms where it’s imperative for data and technology to work in tandem to produce mutual gains like incremental revenue opportunities, increased viewership, and the acquisition of new customers.  If platforms are transparent with their data and collaborate with content owners, then those content owners can leverage that data to further promote viewership and drive new users to that platform - creating win-win scenarios for all parties.   

Adam Bergman, VP National Ad Sales at VIZIO highlighted the ways in which data can inform and improve consumer experience, which is a key factor in why people watch one service over another.

VIZIO has invested heavily into its FAST environment with WatchFree+, a free streaming service that provides access to endless entertainment across hundreds of live channels and thousands of on demand titles. Because of our rich glass-level data, we know what people like to watch, and we are now able to curate content that viewers want most with home screen targeting capabilities that deliver a more relevant entertainment experience. When you focus on consumer experience - monetization follows. The smart TV home screen is increasingly becoming the last opportunity and touchpoint for an advertiser or media company to capture the attention of audiences before they dip into a streaming service. In other words,smart TV home screens are the last gas station for 40 miles.

Field Garthwaite, CEO & Co-Founder at IRIS.TV spoke to the need for a consistent and standardized identifier so that brands can have insight into the content of the shows their commercials are running against, something that is of great importance when most inventory is sold programmatically.

The growth of FAST channels has created new challenges for buyers. Today there is little to no ability to guarantee the brand safety of an ad pod. Only around 12.5% of ad requests have any data that provides content transparency or intelligence to buyers. While this has been standard in display advertising until now, brand safety and contextual information for video has not been available or actionable at scale. Through advances in video data connectivity, this information can be made available across CTV for every video, TV show, and movie. The IAB TechLab's OpenRTB Community Extension for Extended Content Identifiers has outlined how this framework for video-level transparency can be securely deployed across the streaming video ecosystem. This means that all pieces of video content can be assigned an IRIS_ID, a persistent content identifier that provides a standard for the whole industry to help advertisers connect with consumers in meaningful and effective ways in new emerging digital environments like FAST.   

Stu Schwartzapfel, Senior Vice President, Media Partnerships at iSpot pointed to the vast growth potential for the FASTs, given that most have done little to nothing in the way of self-promotion to draw in new viewers.

FASTs are really just getting started on their growth trajectory, which becomes more evident when you look at these brands' share of voice in terms of TV ad impressions— not even 6% so far in 2022 when discounting Peacock— relative to other streaming services. The likes of Pluto, Prende, Roku and others have yet to aggressively advertise on TV to acquire viewers, leaving a lot of room for expanded user bases going forward.

Adam Helfgott, CEO at MadHive noted the power of the FASTs to reach local audiences and the ability of brands to use QR codes on TV commercials to extend the full consumer experience.

CTV enables brands to leverage the high impact TV environment with the targeting capabilities of digital, including hyper-targeted local audiences at scale across the US. And at a time when 70% of consumers use smartphones while watching TV, advertisers are leveraging QR codes to turn CTV into a full-funnel marketing tool for advertisers.

Michael Tuminello, VP Strategy at Mediaocean brings up the interesting issue of the range in quality of the programming available on many of the FASTs and the value of being able to give viewers (and advertisers) access to premium content.

FASTs are interesting because they sit at the intersection of two issues in the CTV space – first, the need for more supply; and second, the perception of TV as a premium ad experience. Some are already starting to produce original content to help to define themselves as premium; in essence, they are a destination for intentional viewing by audiences. Some will inevitably struggle to define themselves and gather content where they can, cater primarily to programmatic demand, and worry less about the premium question.  One key difference between CTV at this stage is that there is a substantially larger barrier to switching apps than there is to switching channels. The TV platform companies have an advantage in their ability to more seamlessly interweave access to their ad supported content with access to premium CTV app content.  Having recently set up my neighbor’s smart TV, I would argue that in some cases these can approach “dark patterns.”  No one wants TV media to fall in value, so hopefully quality continues to win over quantity. Otherwise, we’ll have a self-fulfilling prophecy where the TV experience becomes convoluted enough through the quest to monetize that the audience flees for greener pastures. 

Kate Ginsburg, Head of Content & Product Marketing Tubular Labs spoke to the ways that FAST channels can use social media in general and social video in particular, as a way to promote their programming and engage with audiences.

Social video has long occupied a similar space to FASTs. As these services carve out their own lanes to engage with social audiences through free video programming, it will be interesting to see how this influences the way marketers make content investment decisions.

Jon Stimmel, Chief Growth Officer at Sabio looked at how the digital nature of CTV allows brands to use their FAST advertising to become part of a larger funnel, especially when paired with mobie.

For the first time ever, CTV allows brands to turn the biggest screen within the home into a funnel program. Tools like QR codes within commercials, which we saw demonstrated and validated by the Super Bowl, allow people to bridge the gap between CTV and mobile to drive actionable and real results.  

Justin Fromm, Head of Research at LG Ads Solutions pointed to the key role the linear nature of FAST channels has in helping consumers avoid decision paralysis, while shorter ad breaks make for a better consumer experience.

FASTs are the future of cable. The turn on and tune in opportunity that FASTs offer has tremendous value, especially alongside the wide variety of on demand offerings, across which the volume of content can cause decision paralysis. In research that we have conducted with a national sample of Connected TV households, FAST Channels received higher scores on "Always has something I like to watch" and "Makes it easy to find something to watch" than AVOD, SVOD, and Cable/Satellite among users of each type of service. With shorter ad breaks and without the monthly cost of cable and satellite, we expect to see the adoption of FASTs continue at a rapid pace.

Our TVREV take is that FASTs are still in their infancy, that the ecosystem will evolve tremendously over the next few years, with an emphasis on quality content and in providing advertisers with a better environment that allows for omnichannel campaigns. Driving it all will be the ability to capture a massive amount of data about all aspects of the experience, both consumer and advertiser.