Dec'23·Jordi Capdevila·3 MIN

What are CTV and FAST? Why are marketers actively investing in them?

Home What are CTV and FAST? Why are marketers actively investing in them?

Streaming services are one of the most sought-after subscriptions of the decade. The pandemic was a catalyst that boosted demand, and the number of streaming service subscriptions passed 1 billion worldwide for the first time in 2020. As of March 2023, 78% of all American households subscribe to at least one or more streaming services. With 231 million subscribers, Netflix ranks as the most subscribed video streaming service globally. 

The steady rise of popular streaming services like Netflix, Amazon Prime, Hulu, and Disney+ has contributed to the popularity of Connected TV or CTV. Connected TVs have become the choice among the masses because it gives them the flexibility to connect to the internet, and seamlessly switch between traditional television and online streaming. In 2023, a whopping 88% of U.S. households owned at least one internet-connected TV device, while the number of CTV users amounted to more than 110 million among Gen Z and Millennials.

Investing in Connected TV advertising 

With a constantly rising viewership, advertisers quickly began exploring CTV advertising, recognized its potential, and have been making significant investments in the past few years. In 2023, CTV advertising spending in the United States was expected to grow by 21.2% to reach 25.09 billion USD. CTV ad spend is expected to grow to 40.9 billion USD by 2027.

A seamless and convenient option to deliver ads where the masses are, CTV ads are similar to YouTube ads. Marketers can serve personalized, skippable ads to target audiences while they are streaming content on their TVs. The appeal of CTVs has grown owing to more widespread and reliable internet connectivity. 

Additionally, beyond the ability to pick between traditional TV and streaming, since connected TVs are connected to the internet, they are highly versatile and support additional features. They give users access to OTT streaming, social media browsing, and watching traditional television as scheduled, delivered through streaming TV apps over the internet rather than traditional broadcast networks.

As television devices become more affordable and a variety of content becomes more accessible, the audience is naturally inclined towards having the option to take their pick and have full control over what they watch.

Marketers: Get acquainted with FAST

FAST, or Free Ad-Supported Television, refers to streaming television services that are available to viewers at no cost. So, how do they generate revenue? Simple; advertising. These platforms do not charge users any subscription fee but, similar to subscription-based streaming services, they offer a variety of on-demand content. They rely solely on advertising for monetization to support their operations.

FAST platforms typically offer a range of content, including movies, TV shows, news, and sometimes live TV channels. Advertisers pay for ad slots, and the ads are displayed during and between content streaming. This revenue supports free access to content for viewers. Some examples of Free Ad-supported Streaming TV services include Roku Channel, Tubi, Pluto TV, Crackle, Peacock, and Samsung TV Plus. 

Marketers have been investing in advertising on FAST platforms because it allows them to reach a diverse and sizable audience base and a broad demographic range. Another key aspect is that it allows marketers on a tight budget to reach a large audience without spending significant ad dollars. It is a more cost-effective option when compared to expensive traditional TV advertising. 

As the “cord-cutting trends” rise and more viewers shift away from traditional cable in favor of streaming services, FAST opens up new opportunities. It allows marketers to stay relevant and reach audiences on platforms where they are increasingly spending their time. Marketers can explore innovative ad formats like interactive ad experiences and sponsored content to engage viewers. Tracking campaign effectiveness is also better on FAST platforms by accessing metrics such as impressions, click-through rates, and engagement that provide valuable insights.

Making the shift to CTV and FAST 

Offering a unique opportunity to meet the audience where they choose to spend a significant amount of time watching content of their choice; CTV advertising and FAST platforms present marketers with a great alternative to traditional ad practices that are pricey and stereotyped. Traditional TV ads just display ads but with CTV and FAST, brands can choose what content they want to advertise beside. This gives marketers more flexibility to align messaging and design with user interests and brand values.

  • Improved understanding of viewer interests
  • Ads that are non-intrusive and relevant to the current content browsed by the audience
  • Messaging in line with the brand's ideas and values
  • Compliant with all privacy laws as it does not leverage third-party cookies

They also offer more control and transparency, allowing marketers to have a clearer understanding of where their ads are being displayed. Thus, the newer methods help marketers elevate brand safety, brand suitability, and the overall use experience. 

Let’s take an example - You are a regular on a travel channel and passionately follow a particular show that covers unique experiences in lesser-known locations. If a brand curates exclusive, personalized travel itineraries and experiences, you fall under its “ideal target consumer” category. The chances of you wanting to know more about what they do, how they do it, and possibly wanting to plan an experience are much higher. So, if you see their ad during or right after your show, you are likely to explore more. 

Still in its early days, CTV and FAST are growing rapidly but come with some challenges. While significant improvements have been made, measurement and tracking of campaigns on television still have certain difficulties. Ad blocking and ad fraud also continue to be significant obstacles in CTV targeting. However, partnering with the right experts and staying tuned to updates and enhancements in the space can hugely benefit marketers. The ability to leverage the latest tech and reach a wider audience that was not accessible before unfolds newer possibilities and opportunities that brands and marketers must explore to stay on top of their game.


2024 Big Bets: What’s changing in the adtech world?

See next 2024 Big Bets: What’s changing in the adtech world?