What is Fast Becoming the Viewing Option of Choice for Many Viewers? It’s F.A.S.T.

It's no secret that connected TV (CTV) has been on a roll. U.S. CTV ad spend is expected to reach $14.12 billion in 2023, which is more than double the amount it garnered in 2016, according to eMarketer.

But a lot more information, some of which is surprising, recently emerged in Comcast Advertising's recent report, "Free Ad-Supported Streaming TV: Why More Advertisers (and Consumers) are Going F.A.S.T." It specifically focuses on CTV services that fall into the FAST category (free ad-supported television). FAST programming services -- which include XUMO, Tubi and Pluto -- offer both on-demand and linear viewing options, and they capture cord-cutting consumers. "This report was interesting in that it provided a full view of just how quickly FAST is growing," said Travis Flood, Director, Customer Insights, Effectv, a business unit within Comcast Advertising. "According to the report, FAST penetration among households has more than doubled year-over-year. And today, six out of 10 households who have connected TVs are using FAST services, either exclusively or in addition to other services." The report also shows that FAST services garner higher Net Promoter Scores (NPS), a metric that suggests viewers of the platform are satisfied and loyal. FAST distinguishes itself from other types of video services, such as subscription video on demand (SVOD) and advertising-based video on demand (AVOD), because it doesn't require a paid subscription or password -- and it offers both linear and on-demand content. With FAST, linear streaming channels are created using a specific technology that stitches VOD together to create linear viewability. "For advertisers, FAST provides a unique opportunity to reach cord-cutters while they are scrolling, channel surfing and discovering new content -- a prospect not possible through ad-free services like Netflix, or even from ad-supported on-demand services like Crackle," the report notes. "When creating our FAST report, we worked with XUMO to better understand how consumers are using FAST services today," Flood explained. (The XUMO service is also owned by Comcast.) The report shows that there is considerable viewer overlap with other streaming services, many of which are not ad-supported. Of XUMO viewers, 77% subscribe to Netflix, 80% subscribe to Hulu and 65% subscribe to Prime Video. While FAST content is available on all kinds of video devices, the screen of choice is usually the largest in the house, offering a lean-back viewing experience not unlike linear TV. Because of that, big-screen FAST viewers are prone to channel surfing. In fact, the report reveals that it's not unusual for viewers to land on FAST services without realizing it and then spend time engrossed in the content. This is especially true of cord-cutters, who don't have a cable program guide. The report also analyzes viewer preferences by genre on the XUMO service: "Crime TV, game shows and daytime TV are [among] the most popular genres on the service, behind news and movies," Flood said. "There is such a diverse mix of programming available on FAST services today, so it is very useful to understand the type of content users are gravitating towards." Fern Feistel, Vice President, Marketing & Content Operations at XUMO, noted that "the report shows an increasing appetite among viewers for series-based channels on FAST, services that [viewers] can tune to, lean back and binge. "These series-based, or theme-based, channels such as Baywatch or Fear Factor are resonating with audiences and represent one of the main differences between FAST and traditional TV offerings," she added. While measurement of FAST services is in the development stage, the report indicates that, generally speaking, FAST audiences spend considerable time on these services (about 104 minutes within a platform once they have entered). They also tend to be Millennials (a generation that values affordability, accessibility and nostalgic experiences through technology). These viewers are also open to advertising and don't mind ads if the content is free and if the breaks are short (75% of respondents). What's more, 69% of survey respondents said that they would consider replacing paid streaming services with ad-supported streaming services. That may be an indication of how FAST could change the video dynamics moving forward. What are some others? "It's hard to predict six months out, let alone three years from now," Feistel said. "But we anticipate continued growth in viewership because of the low barrier to entry and 'lean-back' viewing experience." She expects that FAST will continue to gain momentum with advertisers, "especially if FAST services continue to invest in ad technology to make their service more scalable and targetable for advertisers." Click here to download your copy of "Free Ad-Supported Streaming TV: Why More Advertisers (and Consumers) are Going F.A.S.T."

A Deep Dive into AVOD. An Interview with Penthera’s Brian Kline

Technology is improving the quality and ability of viewers to customize their media usage in both online and offline environments. In this ecosystem, ad tech is advancing especially in AVOD, according to Brian Kline, President of Penthera.

Charlene Weisler: What are the greatest opportunities for advertisers in AVOD today?

Brian Kline: Streaming can offer similar or greater reach than traditional TV distribution while at the same time offer much more granular targeting and data availability. As large segments of the population migrate to be “streaming 1st”, AVOD publishers can offer advertisers a mechanism to reach these audiences that are difficult to find on traditional TV platforms. Beyond this, there are a number of innovations coming that will enable advertisers to have a broader spectrum of creative delivery options/audience ownership. While the initial iteration of CTV/OTT has relied on a traditional TV advertising model, this is changing and evolving to bring innovative approaches that will deliver more flexibility and customization for advertisers, at scale, with the ability to micro-target audiences.

Weisler: What are the greatest challenges to advertisers in AVOD today?

Kline: Fragmentation across inventory sources and technology platforms and budget control / management. As streaming becomes a more important part of the media mix, the decision on where to manage budgets is becoming critical. What we’ve seen in the market to this point is friction between an advertiser’s TV and digital agencies. TV agencies view AVOD/Streaming as “digital” and aren’t generally used to buying media in the way that AVOD is sold (data driven, not measured by Nielsen, using programmatic systems, etc). Digital agencies are generally very comfortable with these points but find themselves fighting for access to “TV quality” ad assets and budget. Much of this could be resolved at the advertisers direction, but the decision on how to handle this new channel, from an agency standpoint needs to be made.

Beyond this, technical and platform fragmentation presents a challenge for advertisers. Each platform can have their own creative technical specifications, publishers tend to use multiple programmatic selling platforms (SSPs) and advertisers often use more than one buying platform (DSP) which opens the potential for an advertiser to bid against themselves for the same piece of inventory. There are paths for solving this problem, but it’s important for advertisers to be aware that it exists and to find mechanisms for measuring the occurrence of self-competitive bidding.

Weisler: You have a new product called 2nd Look. What does it do?

Kline: In VOD with SSAI, all of the ad decisions are made in between the time that the user presses “play” on their device and the first frame of the video showing up. This is because the ads must be “stitched” into the stream (technically the stream’s Manifest) before playback begins since the player will only request the stream’s Manifest once at the beginning of the process. Offering the stream’s entire inventory simultaneously and well ahead of when the ads are going to run has a number of negative effects including  1. Forcing a large volume of decisions to be made in a compressed timeline which increases the chance of timeouts and failure to fill inventory, 2. Placing ads in the stream that will exceed their timeouts (e.g. ads in the second hour of a movie that required a <10 minute time-to-live) causing publishers to go unpaid, 3. Forcing ad systems to evaluate all of the inventory at once instead of on a pod by pod basis, leading to uneven or reduced advertiser participation through the stream. 4. The net result of these issues to an AVOD publisher is lower fill, lower CPMs on ads that are filled and missed revenue opportunities.

2nd Look is a cloud service designed to address these issues. We accomplish this by eliminating the requirement to make decisions upfront, and enabling decisions to be made immediately before each pod. In doing so, we enable the publisher’s ad server and programmatic systems to operate more efficiently. It does not replace any part of the publisher’s ad stack and is interoperable with any VOD stream, from any type of device (CTV, mobile, PC, etc.) that uses SSAI.

2nd Look also addresses low render rates which measures the % of ads presented to the viewer relative to those that were decisioned by the ad server. As mentioned, with SSAI, all of the ads are decided for the stream up front. If the viewer leaves after seeing half of the ads, the render rate would be 50%. Render rate is important for two reasons. The most obvious is that the publisher may be paying serving/stitching fees on all ads, but only being paid by advertisers for half in our example. The more concerning issue is that render rate is used by DSPs and other programmatic systems to model the attractiveness of inventory. Low render rates cause less bidding volume, and lower CPM bids because the bidder is less confident the ad will be seen. AVODs using SSAI are disadvantaged in these algorithms.

2nd Look, positively impacts all of these challenges. In offering each pod independently, we enable the publishers’ ad decisioning systems to operate more efficiently resulting in higher fill rates and more advertiser participation across the stream. This drives up CPM, fill rate and overall yield. 2nd Look integrates with a publisher's player via simple HTTP interface and the publisher’s ad stitcher (via their standard APIs).

Weisler: Do you collect any data and if so, what and how is it used?

Kline: We will be collecting session level data to include; session ID, # of pods in the stream, # of pods requested, duration of ads requested, duration of ads filled, % of pods filled based on time duration (e.g. 2 min requested, 1:30 min returned = 75% fill based on time). Depending on the ad stitcher, we can also report on # of ads filled. The data we are collecting is more publisher performance oriented. There are 2 key data points that we use/impact that advertisers will leverage are the session ID and the render rate as described above.

Weisler: Where do you see AVOD in the next 3 years?

Kline: We expect AVOD to continue to grow and account for the majority of viewing hours and expect  more hybrid subscription models that are partially or entirely subsidized by advertising. As SVOD publishers reach market penetration limits, they will be forced to explore new revenue models that can enable their continued revenue growth. The market will influence how much SVODs can charge for a subscription and user’s disposable income will dictate how many subscriptions they can afford. To capture additional users who have allocated $$ elsewhere, SVODs who offer AVOD tiers will lower the bar to entry and see expansion in the number of users interacting with their service.

 

This article first appeared in www.Mediapost.com

Artwork by Charlene Weisler

The Importance of Streamers. An Interview with Tubi’s Melinda Staros and Natalie Bastian

Since the pandemic, VOD has accelerated in its growth and acceptance among viewers, but its rapid progress is out-pacing our ability to assess its full impact on the media business. This is why Tubi’s recent study called, The Stream – 2021 Actionable Audience Insights for Brands, is a welcomed addition to our knowledge of the state and the future of AVOD for both advertisers and programmers.

The launch of this expansive study involved a partnership between Tubi, which is owned by FOX, and an impressive roster of first and third party data sources in order to match the quantitative with the qualitative results. For Tubi’s Natalie Bastian, Vice President Marketing, the study opened up, “a treasure trove of insights we had at our disposal because we are the platform and are so focused on data, tech and our audience. It is one of the best untold stories.”

The Stream, The Study

In offering an overview of the findings, Bastian explained, “The report looks at the broader shifts of content consumption, the rapid growth in streaming but specifically in AVOD and how AVOD is at a pivotal point of scale. We are going to see fundamental shifts in how brands are shifting their TV strategies especially going into upfront this year. Scale, targeting and measurement are all coming to a head. Because of our scale, (the results are) representative of the broader AVOD streaming audience.” The report is timed to maximize the value of AVOD in the upfront as an addition to linear. “This is our first proprietary research study,” she added, but not the last. The Stream is poised to be an ongoing assessment of the marketplace and the importance of AVOD in it. “This is our stamp and our voice,” regarding, “consumption and engagement and the reasons why consumers are gravitating to streaming platforms.”

The Stream, The Meta-Analysis

The study’s methodology was especially interesting to Melinda Staros, Tubi’s Director of Audience Research, “It was a meta-analysis of first party and third party data and our ability to thread that together. We used our first party audience data with all of our proprietary analytics – this was the first time we were using these to this scale.” The study also added Tubi’s qualitative research and, “all of the interviews we have done with our streamers for the past couple of years.” In addition, “We ran a custom B2B research study with Advertiser Perceptions,” which was then shared publicly and incorporated data from a number of different industry research sources such as MRI Simmons, TVSquared, Kantar and Nielsen. “There are many layers to peel back in this report,” she noted, “and it’s a compilation of all of these different methodologies and how they connect together.” The uniqueness of this study is its 360 degree holistic view of the industry.

The Stream, The Takeaways

For Staros, the study’s biggest takeaway, “has three layers. The first one is the industry where we found a discrepancy in the numbers. Seventy-nine percent of the people are streaming, growing daily and cutting the cord for cable. Streaming is so prevalent on the consumer side … and yet up to 90% of the video ad spend is still going to linear. There is a disconnection from the B2C side to the B2B side of the business.” But she is sure that will change in the next year. “From an audience perspective,” she continued, “it’s really the fact that it is incremental audience and that they are nationally representative. They are young and diverse as we see the national US population is. The industry isn’t necessarily used to that. The third is measurement. That is having substantial impact.”

For Bastian, an ah-ha insight was that, “When people in the marketplace talk about incremental reach the assumption is that it is incremental over linear TV. But what we found is that our audience is uniquely incremental to other streaming audiences as well.” She pointed out that while there is little overlap between Tubi and other AVOD audiences, there is some overlap between her service and Netflix which is not ad supported, thus enabling advertisers to reach those desirable audiences through Tubi. “We find that not only is our audience young, diverse and highly engaged, we can click into what they are watching, how long they are watching and when they are watching.” Tubi also boasts one of the lowest ad loads in TV – an average of 3 to 5 ads per hour.

The Stream, The Pandemic

While some industries have been negatively impacted by the pandemic, for Bastian, “The pandemic has across-the-board expedited the speed to stream for consumers.  It has accelerated launch efforts for other platforms to come to market,” but, she added, “I think that will level out over time. I think that over the next year, consumers will say, ‘wow, I’m spending so much money in streaming’… I think SVOD will level off and AVOD will continue to rise … especially free AVOD,” which includes Tubi.

“In terms of the numbers we are seeing, the pandemic has had a big impact on the sudden jump in the number of people streaming and the amount of time they spend streaming,” noted Staros who added, ”one in five people have cancelled their paid streaming service because of Covid and that was especially true of people ages 18-34 (at 33%) who tend to have lower household incomes and tend to be early adopters.”

The Stream, The Value to Advertisers and Programmers

For both Bastian and Staros, the value of AVOD and Tubi in particular to advertisers is a no-brainer.  Bastian explained that, “when you look at how linear and cable numbers are shifting and how streaming numbers are growing, you need to be able to diversify where you are spending your money.” She believes that buyers will pivot and make AVOD a must-buy with Tubi at the top of the list. “We have one of the largest, most engaged AVOD and we are nationally representative and we are highly targetable as well,” she stated.

For programmers, Staros shared that it is possible to take a program on linear that may skew older and, on a young platform like Tubi, age it down. “When FOX released the Masked Singer on its network, they had huge viewership, but it skewed significantly older,” she explained, “The big question was, if they put it on Tubi could they reach a younger audience or is the audience inherently older? The answer was that the platform dictates the type of viewership that you are going to get.”

The Stream, The Future

The future is bright for AVOD. “Streaming consumption is only going to continue … and in two years ad supported streaming will surpass cable … at a high level,” Bastian noted. The data supports this. “The more cord cutting, the more streaming, the more services, there are definite changes happening in the marketplace. The shift is really pronounced in that there are so many people who are not  going to be reachable through linear that at some point we are going to hit a threshold. They are saying by 2023,” Staros concluded. The future certainly looks exciting, especially for AVOD.

This article first appeared in www.MediaVillage.com