AVOD and FAST have been on an incredible growth curve over the last 3-5 years. The platforms offer an attractive mix of linear and digital features for advertisers.
In this Q&A with Operative’s SVP of Global Sales, David Dembowski, we dive into some of the opportunities for streaming companies, as well as the foundational tools they need in order to make the most of it.
David brings 20 years of leadership experience with media and technology companies, including Operative, Standard Media Index, IgnitionOne, and Yahoo. Currently, David serves as SVP of Sales at Operative and is responsible for global revenue. He is recognized for his stewardship, team development, and operational rigor. In addition, David has been acknowledged for his community service work and commitment to developing an inclusive work culture.
David holds a Master of Science in Strategic Communications and Leadership from Purdue University and many industry certifications. He resides in Fairfield, CT, with his wife, Vanessa, and their three children. He enjoys the Green Mountains of Vermont with friends and family in his free time.
Q: Dave, can you tell us why streaming models like AVOD and FAST are so appealing to publishers?
A: Of course – both AVOD and FAST are appealing, but for different reasons. AVOD offers the ability to lean in and select specific content to watch. FAST, on the other hand, offers the ability to lean back and let the channel provider drive. Both have a time and a place. If I’m time-constrained on a weekday evening, I’ll often select what I want to watch through an AVOD service like Peacock. But if I just want to relax on a weekend, I may fire up Pluto TV and check out what movies are playing.
The streaming market has been growing by leaps and bounds. According to IAB, streaming ad revenue is growing about 20% per year, expected to be approximately $55 billion in the US in 2023.
Specifically, the recent growth of FAST has been amazing to follow. There are a lot of people who want that “lean back and watch” experience – and that means new advertising revenue opportunities. More than half of US households, 57%, are already watching content on FAST apps, and the ad revenue market was about $4b in 2022
In the US in particular, FAST gives publishers a new way to attract “cord cutters” with linear-style programming. The number of households that subscribe to pay TV has fallen below 50% and Insider Intelligence predicts it will sink to about a third of households by 2027.
Q: What do advertisers like about streaming platforms?
A: Advertising on streaming platforms delivers an enticing combination of linear and digital benefits, and helps advertisers drive outcomes rather than simply impressions.
Linear benefits: Advertisers can essentially recapture a valuable and big audience of former linear viewers on FAST and that means great reach. Scheduling, dynamic ad insertion and programming all work similarly to regular linear TV advertising, and advertisers can work with their top TV broadcast and MVPD partners.
Digital benefits: At the same time, FAST has digital capabilities similar to AVOD. It’s addressable, which allows advertisers to target their key audiences using first and third-party data. And with frequency capping, brands can eliminate digital waste in their ad budgets.
Increasingly, we’re seeing streaming companies partner with retailers to drive added value to their advertisers. Kroger teamed up with Disney to help them with audience targeting. Walmart partnered with Roku to measure how CTV ads are influencing purchase decisions. This is a trend that advertisers love – it will ultimately enable them to better target their ads and better measure outcomes.
Traditionally TV has been a brand play. Digital was always a performance play. But now, advertisers can find and target consumers in all stages of consideration through streaming. DTC brands, specifically, have traditionally loved search & social for performance marketing initiatives. Now they can go upper funnel towards AVOD & FAST and gain the same outcome-oriented metrics.
More than half of all advertising on streaming platforms is managed through Operative.One software.
Q: How can Streamers make the most of advertising opportunities?
A: For streaming companies to profit from FAST and AVOD, their advertisers need to be able to make the most of this exciting channel. That means streamers need to be able to create products that deliver flexible combinations of reach, targeting, frequency capping and more. Streamers need to consider partnerships with retailers. Advertisers also might want to use new currencies or want to bundle streaming into a multi-platform media buy.
To make this happen, streamers need:
- A centralized product catalog that brings FAST and AVOD inventory together with other channels
- Fast and flexible proposal building and self-serve ad management tools to provide best-in-class products to advertisers
- Comprehensive audience targeting tools to optimize CPM’s
- Scaled order management to maximize yield
- Transparent reporting that’s available on-demand
AVOD and FAST are clearly here to stay. They bring together linear and digital, capture audiences that have cut the cord, and entice brand advertisers with highly addressable audiences. Streaming companies need a modern, flexible, scalable solution so that advertisers can buy what they want and publishers can deliver – and profit.
With the right system in place, publishers can be in control of streaming ad revenue and growth, and can create strategic package deals that flexibly bundle premium inventory with their broader product set, including digital video and display.
Q: How does Operative work with streaming companies?
A: AVOD and FAST represent the future of advertising, and so does Operative. Operative has been working with many of the top streamers – including Hulu, Paramount, PlutoTV, Roku, Samsung, Warner Media, Peacock, and Crackle – for several years, providing a variety of solutions to help maximize the value of their platforms. Ultimately, we’ve learned a ton from our customers, and have built out two solutions to address this growing market.
- Operative.One is the industry ‘gold standard’ for managing fully scaled digital advertising sales and operations on a global basis. In market since 2010, the software provides our customers with a comprehensive command center to manage the full order lifecycle worldwide, across pre-sales plan building (campaign planning and proposal generation), self-serve ad management, through to order execution, reporting and billing. Today, more than half of all advertising on streaming platforms is managed through Operative.One software.
- Operative AOS software is a modern cloud-based SaaS platform that supports linear and digital advertising and delivers on the “converged” promise of linear and digital ad units within the same deal. Without getting too technical, AOS leverages the most modern foundational tools available — built on a microservices-based core infrastructure that is extremely flexible and delivers reliability, infinite scale, and modern interoperability across a suite of business modules. We’re excited about the future of AOS for all customers.
Q: Thanks Dave! Anything you want to wrap up with?
A: We’re excited about the future of streaming, and we’re working hard to ensure our customers have flexible, scalable, market-leading tools to power their advertising sales and operations. I’m fairly certain the streaming models will continue to evolve, and as a company we’re 100% focused on driving advertising success for our customers regardless of where that evolution goes. It’s an exciting time in TV & Video, we’re excited to partner closely with our customers to forge the road ahead!