The free, ad-supported streaming TV market has come of age

In this week's Future of TV Briefing, available exclusively to Digiday+ members, senior media editor Tim Peterson looks at how the free, ad-supported streaming TV market has entered a new era in its maturation. 

This week’s Media Briefing, another member exclusive, looks at how the pandemic and the cookie’s eventual demise have created the conditions for the programmatic ad market that publishers have been pushing for.

You can get a taste below and subscribe to Digiday+ annually for less than $1 a day for full access to all briefings as well as original research, reports and guides, tutorials, unlimited stories and much more.

Future of TV Briefing: The free, ad-supported streaming TV market has come of age

By Tim Peterson

FAST forward

The free, ad-supported streaming TV market has matured through the growing pains phase. There remain some pain points, like the pressure of programming costs, but the swelling of the FAST industry has helped to offset those issues and introduce some stability.

The key hits:

• The FAST market is evolving past the era of TV reruns and repurposed social videos.
• A rise in viewership and the expansion of platforms has helped to stabilize the FAST business.
• FAST platforms and channel operators are investing in higher quality programming, including original and exclusive shows.
• Advertisers see the FAST market as a reliable piece of the streaming ad mix.

Over the last six months, digital studio Gunpowder & Sky has seen its FAST business begin to stabilize. That stability doesn’t stem from the FAST market settling down, though, nor does it mean that FAST viewership is slipping or advertiser interest is cooling. Instead, it’s a sign of how the business has come of age as more FAST services and 24/7 streaming channels have come into the market.

“What we’re seeing is a growth rate across the board. The line is straighter where the peaks and troughs are less for now. Initially, it bounced all over the place,” according to Floris Bauer, cofounder and president of Gunpowder & Sky. The company operates 24/7 streaming channels across a variety of FAST services, including Amazon’s IMDb TV, Roku’s The Roku Channel and Samsung’s Samsung TV Plus.

When Gunpowder & Sky stepped into the business in 2018, the FAST industry was relatively nascent. Viacom had not yet acquired Pluto TV; Roku’s year-old The Roku Channel had only just begun adding 24/7 channels; and Amazon was a year away from pitching publishers on distributing their linear streaming channels on IMDb TV, which did not debut until 2019. The next few years were a boom time for the FAST market, but a volatile one as companies adopted a “Field of Dreams” mentality by standing up FAST properties in hopes of attracting audiences and, in turn, advertisers. And so they have.

What we've heard

“There was some overbuying in the upfront. Buyers were so afraid of what they were hearing [about a lack of available linear inventory] and held on to more linear. There could be a little loosening with some dollars being dropped on orders or [advertisers exercising] cancelation options.”

— Agency executive

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Media Briefing: Publishers’ programmatic ad businesses have rebounded to pre-pandemic levels

By Tim Peterson

‘The Year of Private’

Publishers have absorbed the hits of the pandemic and the third-party cookie’s eventual demise, and they found the two to have actually put their programmatic advertising businesses in a better place. Not only have programmatic ad prices rebounded to exceed pre-pandemic marks, but publishers are enjoying more direct dealings with advertisers purchasing their inventory programmatically through private channels.

The key hits:

• Programmatic ad prices have risen in the first half of 2021 to surpass their 2019 comparisons.
• Publishers are seeing advertisers move money from the programmatic open marketplace to private automated options that give publishers more involvement in their ad sales.
• Publishers are having success incorporating programmatic into bigger packages as well as selling their video inventory programmatically.

For the better part of the past decade, publishers have tried to protect their positions in the programmatic ad ecosystem. They may have provided the inventory on which the programmatic ad market is built, but the influx of intermediaries — from demand- and supply-side platforms to ad exchanges and agency trading desks — put them on the outskirts. So they’ve been trying to work their way back to reestablishing direct relationships with advertisers while taking advantage of the efficiencies of automation. And over the past year and a half, they have moved ever closer to that promised land.

Having direct relationships with advertisers for programmatic sales “is what we’ve been fighting for since 2015 when the myth of programmatic was first busted and [advertisers] said, ‘Why shouldn’t we buy you in the open auction?’” said Scott Messer, svp of media at Leaf Group. “It’s taken us this long to figure out how to regain that control. Even at that, it took the cookie collapse to really push this control back into our court.”

With the third-party cookie on its way out (eventually), advertisers are increasingly accepting that they need to work more closely with publishers that have the audience data to inform who will see a brand’s ads and that can ensure an advertiser knows what inventory they’re buying. However, the pandemic may have been the bigger immediate catalyst in improving publishers’ programmatic relationships with advertisers.

What we've heard

“It’s getting ridiculous. We had someone apologizing on Slack because they couldn’t access a document because they were at the hospital because their wife was in labor. But they were still working.”

— Media employee on the industry’s hustle culture and burnout issue

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Further reading

• How BuzzFeed taps its resources to grow an early foray into livestream shopping
  BuzzFeed is the latest media company to start experimenting with livestream shopping (aka the new, digital version of QVC) as the next big opportunity to maximize its ecommerce business.

• With employee wellness top of mind, more companies push fitness programs as the hybrid return to the office begins
  With the return to the office at hand, more companies are making the wellness of their people a priority — and that includes physical fitness. 

• A Spanish ad company wants to standardize OOH traffic metrics using satellites
  There’s a new player in traffic metrics in out-of-home media, and it’s using satellites to count cars passing billboards.

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