Report: Free Ad-Supported Channels On The Rise; Consumers Actually Don’t Mind Ads After All

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Findings from Hub’s new “TV Advertising: Fact vs. Fiction” report reveal that consumers love their streaming content enough to stay tuned through—and even occasionally enjoy—ads that punctuate their content experiences.

FAST Channels Like Pluto TV, TubiTV And Others Are Winning SVOD Subscribers’ Attention 

Hub’s report shows a 10 percent increase in consumers using free, ad-supported streaming TV (FAST) channels like Paramount’s Pluto TV. Currently, 55% of consumers report that they get at least some of their video content this way. The rise of FAST channels isn’t due to a lack of paid ad-free alternatives, or even “free” alternatives included with many consumers’ basic internet service. FAST channels may offer consumers the kind of neatly segmented thematic content that doesn’t require fiddling with a queue or relying on an algorithm for suggestions or hunting for options by name. FAST channels are often arranged by theme and provide channels dedicated to single niche-but-popular shows, like Pluto TV’s Midsomer Murders and Narcos channels. Last year, Pluto TV, with 64 million monthly users, managed to top $1 billion in ad revenue. This was a feat that underscores advertisers’ willingness to place their bets on cord-cutters and prestige network subscribers are heading to free alternatives to access content that includes their ads. 

But why are FAST channels so appealing to consumers who are now awash in content choices and channels offering a range of ad-free paid experiences? The Hub report shows that 56% of consumers would rather watch ads and pay $4-$5 less per month to enjoy streaming content, but consumer interest may be driven by more than a desire to save a few dollars on their monthly budget.

First, there’s the element of content choice. Take children’s programming. Pluto TV has one of the only free channel dedicated exclusively to kid-friendly movies out of the 82 channels focused on kids’ programming that previously appeared on TV or platforms like YouTube. With consumers cutting costs due to the specter of inflation, an always-on channel featuring long-play kid’s content can be an enticing alternative to paid services. 

FAST And Paid SVOD With Ads Can Coexist—And Marketers Should Take Note

FAST channels also serve as an enhancement for SVOD services, allowing consumers to prune their subscriptions and keep the ones that deliver the most value or that provide content they can’t find on their favorite FAST channel. For example, 70 percent of FAST channel Xumo’s viewers use streaming services exclusively for video content, with 80 percent of these subscribing to Hulu and 77 percent to Netflix.

According to Amanda Garcia, Senior Director of Partnerships at Paramount+ in a recent report produced by Comcast, “As customers find more ways to watch the content they love across a mix of services, FAST channels have become a key part of our media mix for acquisition and awareness, as well as targeted campaigns to super-serve key audiences.” That’s important, as consumer willingness to stay engaged with paid streaming services is now becoming tenuous due to inflation concerns—and budget-minded viewers are now canceling services at meaningful rates. Even at the height of the pandemic, when millions of Americans were home with more time to stream, consumers were prone to prune their subscriptions in search of better deals or better experiences.

Between July 2020 and February 2021, the number of TV viewers saying they had added a new SVOD service grew from 28 percent to 44 percent, but the share of consumers stating that they canceled a service rose from 18 percent to 25 percent during the same period.

That means consumers’ attention can go either way—more towards FAST channels when SVOD content feels stale (or costs become prohibitive) or back to paid SVOD when engaging original content draws them back.

Consumers Don’t Mind Ads, Just Make Them Worthwhile

The big takeaway here is that ads are not the problem when it comes to consumer engagement and satisfaction. The Hub report states that in its survey, subscribers to the ad-supported tiers of streaming services are, for the most part, “equally likely to feel they get “excellent” or “good” value from the service as those who subscribe to the ad-free versions.” In addition, subscribers to Discovery+ and Paramount+ with ads are “actually five points more likely than ad-free subscribers to feel those services offer excellent or good value.”

According to the Hub report, viewers of content on an ad-supported streaming platform reported distinct differences in their enjoyment of their viewing experience based on the relevance of the ads they remembered. For viewers who remembered ads relevant to their interests, 69 percent said they enjoyed the entire experience of watching programming. For those who didn’t see relevant ads, only 48 percent reported enjoying their experience. Consumers are also paying attention to ads on paid services. The report states that two streamers, Discovery+ and Hulu, led in the amount of attention their users paid to ads during commercial breaks (8-10 on a 0-10 scale).

“Flashback to the late 2000s: take the rapid success of ad-free streaming services like Netflix, add in the gradual erosion of traditional pay TV subscribers, and many industry experts began to predict that ad-supported TV would go the way of the dinosaur,” said Peter Fondulas, principal at Hub and co-author of the study.

“It turns out the issue consumers had with ad-supported platforms was not the fact that they included ads at all, but how the ads were delivered. With reasonable ad loads, more relevant targeting, and a quid-pro-quo agreement (watch ads, pay less), the industry seems finally to have an answer to the question that has dogged it for years: how to get consumers to accept TV advertising.”

Building The Marketing Roadway For The Next Generation Of Campers With Kampgrounds Of America’s Whitney Scott

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From gems to government to camping, Whitney Scott has lived the idea that “once you learn marketing, you can adapt to almost any job in any industry.” As CMO of Kampgrounds of America (KOA) and COO of the newly opened Terramor Outdoor Resort in Maine, Whitney’s marketing strategies bolster the common mission of connecting people to the outdoors and to each other.

In this episode, Whitney and I discuss how she’s using marketing to connect with the new demographic interested in camping, and how data is the key to backing up your marketing tactics. Whitney also introduces KOA’s newest brand, the Terramor Outdoor Resort, now open in Bar Harbor, ME.

In this episode, you’ll learn:

  • How to keep a 60-year-old brand relevant
  • How KOA is upgrading the camping experience for a new demographic
  • Understanding how to scale your digital presence

Key Highlights

  • [01:37] Whitney’s secret talent
  • [02:55] Whitney’s path to Kampgrounds of America (KOA)
  • [05:08] Introducing the new Terramor Outdoor Resort
  • [09:00] KOA’s history and where it is today
  • [13:22] Maintaining a 60-year-old brand and keeping it current
  • [15:28] How target customer data has changed over the years
  • [19:38] Keeping up with the changing needs of KOA’s customers
  • [21:45] How technology has played a role
  • [25:19] Big learnings as CMO of KOA and COO of Terramor Outdoor Resort
  • [27:49] An experience that defines Whitney
  • [29:36] Whitney’s advice for her younger self
  • [31:23] What marketers should be learning more about
  • [35:44] Brands and causes that we should be taking notice of
  • [38:56] The biggest opportunity or threat for marketers today

Resources Mentioned:

Follow the podcast:

Connect with the Guest:

Connect with Marketing Today and Alan Hart:

Alan B. Hart is the creator and host of “Marketing Today with Alan Hart,” a weekly podcast where he interviews leading global marketing professionals and business leaders. Alan advises leading executives and marketing teams on brand, customer experience, innovation, and growth opportunities. He has consulted with Fortune 100 companies, but he is an entrepreneur at his core, having founded or served as an executive for nine companies.

The Trust Deficit: Marketers Have The Power To Boost Brand Trust

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Recent reports by Jebbit and Adobe reveal that consumers are less trusting of businesses and major brands than ever, with worries about data privacy making brand marketers’ challenge especially difficult in the digital age.

Brands Are Finding It Hard To Win More Than Consumers’ Dollars

While consumers are still supporting leading brands with their shopping dollars, their hearts may not be in it. An Adobe survey revealed that 75 percent of brand executives have struggled to build and maintain trust with their customers over the past two years. It’s not that consumers suddenly had a change of heart about the brands they’ve known all their lives; it’s that they are spending more time online than ever, and they are not necessarily enjoying what they see.

While the Adobe study found that 76 percent of consumers said it was important that brands demonstrate they can see things from the consumer perspective and understand their frustrations, 40 percent of consumers, per a recent study by Jebbit, have marked an increase in irrelevant ads. Another 46 percent of consumers in the same study stated that when they encountered irrelevant ads based on their past purchase history, it lowered their trust in the advertising brand. That means brand marketers’ ability to correctly target ads and maintain transparency about how data is being used directly impacts consumer brand affinity: ad content.

Brand Marketers’ Challenge And Opportunity: Rebuilding Trust For Legacy Brands And Stoking D2C Engagement

The Jebbit study also revealed that just 35 percent of consumers trust legacy brands more than D2C, online-only brands. In fact, 22 percent trust D2C brands more, with 43 percent stating that they saw both types of merchants as equally trustworthy. That means the battle for brand trust is essentially a toss-up. Based on findings from the Adobe study, the results may be influenced heavily by the relevance of the content and ads consumers find. The Adobe study found that 72 percent of consumers saw relevant content delivered at the right time and context as a reason to trust a brand more. In addition, over one-quarter of Gen Z and Millennials consumers stated that finding correctly targeted content increased their trust significantly.

Trust Can Mean Growth—In Audience And Revenue

Does trust translate into a healthier bottom line for brands? According to Adobe, 44 percent of global consumers will spend at least $500 or more each year with the brands they trust most, and 29 percent say they will spend more than $1000/year.

With legacy brands and D2C, online-only challengers competing for consumers’ dollars amid economic uncertainty, brand marketers can’t afford a misstep with audience engagement strategy or the content they share.

Kohl’s Appoints Christie Raymond As Chief Marketing Officer

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This week in executive leadership appointments, Kohl’s and Choice Hotels International name new CMOs, while Carhartt names a new chief brand officer. 

Kohl’s Appoints Christie Raymond As CMO

Christie Raymond has been named CMO at Kohl’s, where she will lead marketing strategy, brand, creative, media and communications. Raymond is Kohl’s former senior vice president, media and personalization and holds more than 20 years of executive marketing experience.  She joined the company in 2017 from Walt Disney Parks & Resorts, where she held executive marketing positions for over 15 years. Raymond has served as Kohl’s interim CMO from May 2022. In addition to managing marketing organization, Raymond will direct loyalty strategies and programs, customer analytics and Kohl’s philanthropic initiatives and report directly to CEO Michelle Gass. 

“I’m thrilled to have Christie step into the role of Chief Marketing Officer for Kohl’s. She joined Kohl’s several years ago, bringing her tremendous experience and customer-driven leadership approach to the marketing organization,” said Gass. “She has been an asset to our senior executive team, and she will be instrumental in our continued path forward as we deliver great value, a compelling brand portfolio, and an inviting omnichannel experience to our millions of customers nationwide.”

Choice Hotels International Names Noha Abdalla As CMO

Noha Abdalla has been named CMO at Choice Hotels International, where she will lead brand-building, marketing, advertising and communications strategy. She will report directly to president and CEO Patrick Pacious. In addition to leading marketing efforts, Abdalla will direct the development of a new marketing technology and infrastructure roadmap for the brand. Prior, Abdalla was CMO for MyEyeDr., an optical chain backed by Goldman Sachs.

“Enhancing the guest experience is a cornerstone of Choice’s long-term growth strategy and a critical component of the leading value proposition we deliver for our franchisees daily,” said Pacious. “Noha is an experienced leader with a successful track record of taking world-class brands to the next level. As the company continues to add new experiences and offerings for travelers, we’re confident she is the best person to keep Choice’s finger on the pulse of evolving consumer preferences while driving loyalty and innovation to support our diverse portfolio of brands.”

Carhartt Names Susan Hennike As Chief Brand Officer

Susan Hennike has been named Carhatt’s new chief brand officer. She will report directly to president and COO Linda Hubbard. In addition, Hennike will manage the Product, Brand and Strategy (PBS) team, directing creative marketing, product and R&D strategy. Previously, Hennike was chief product officer at Bombas and president at Champion North America.

“Susan has an incredible reputation of growing emerging and established apparel brands across diverse audiences and reaching consumers creatively and authentically,” said Hubbard. “Her vision will help shape Carhartt’s future, improve the experience for all hardworking people and find new ways to reach those who have yet to experience Carhartt.”

Other Recent Appointments

  • After two years as the company’s VP of Marketing for Strategy and Solutions, Donna Prlich was named as Chief Marketing Officer (CMO) at Planet.
  • Rachel Thornton, vice president and CMO for Amazon Web Services, will leave her position after a decade for personal reasons on August 26. 
  • Jon Asher was appointed as juice bar chain Nekter’s first CMO. 
  • Developer skills company HackerRank appointed Monica Ohara as CMO.
  • Ballet Hispánico, the nation’s largest Latino heritage-focused dance organization, named Elaine Delgado as chief development and marketing officer.  
  • Spotter, a video monetization service for YouTube creators, has named Galvea Kelly as its first CMO.

Trend Set: Week Of August 8th

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Ayzenberg’s Ashley Otah looks at three major cultural trends this week and what they mean for brands.

Teens & Tech

Tech talk. The next generation of tech users is here. Research compiled by Pew Research Center shows how this shift in technology use by those 13-17 years of age is different than their predecessors. They’re not just using technology differently; they also live differently in a digital world. The research shows most teens have access to digital devices, such as smartphones, desktop or laptop computers, and gaming consoles. Teens state that YouTube stands out as the most common online platform, with 95 percent using this site or app, followed by TikTok and Instagram. About six-in-ten participants ages 15 to 17 say giving up social media would be at least somewhat challenging to do. Their younger counterparts, aged 13-14, think this would be less difficult. Understanding the technology behaviors of the next generation can be valuable information for examining the past and writing the future. Brands can ready themselves for the next generation by keeping a pulse on data and culture.

McLaren

Gotta blast. Not your typical workout shoe, the new HySpeed looks more like a luxury car than a piece of athletic equipment. The Bay Area-based startup Athletic Propulsion Labs (APL) debuted the design with Formula One auto manufacturer McLaren—a partnership that will test the limits of two different industries. While McLaren focuses on performance and APL is known for its high-tech and aesthetically pleasing focus on design, the partnership shows how fashion brands are moving away from strict aesthetics into functionality. Additionally, they continue to partner with myriad industries outside their wheelhouse. Although not the first fashion brand to find inspiration in car design, the partnership showcases how brands can make a long-lasting impact with mutually beneficial success in mind.

Alo x Roblox

Mindful moments. What do virtual reality, imagination and avatars have to do with yoga pants? Alo and Roblox. In January, athleisure brand Alo made headlines after it partnered with game developer Roblox to create ‘Alo Sanctuary,’ an online destination focused on yoga, meditation, and breath work. In June, it allowed customers of the brand to make purchases using cryptocurrency and employees to receive paychecks in the same form. Although the future of cryptocurrency, web3 and more fluctuate, the brand stands firm on its decision to keep exploring the space. As holistic living, wellness and well-being continue to hopefully become center stage, it is crucial to understand the implications of that and how brands can be a positive force in the space.

Millennials: Why The New Adults In The Room Are Changing Media And Brands

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Long the butt of jokes about entitled, job-hopping hipsters, millennials are now the new grownups in the room. The oldest millennials are now 41 years old, 46 percent have families, 48 percent have mortgages and some are parenting teenagers. Today’s millennials are driven by values, financial concerns and a desire for authenticity.

Below, we’re sharing what the data says about millennials, including marketer takeaways.

Most millennials have financially supportive parents, their own children, and concerns about their families’ financial future, though many remain optimistic about the economy.

  • 3 out of 5 millennials are parents, according to a 2022 report by GWI.
  • 64 percent of millennials still receive regular monetary support from their parents, according to The College Investor. 
  • 36 percent of millennials are concerned about the cost of living and another 20 percent are worried about unemployment, per Deloitte’s 2022 Gen Z and Millennial Survey. Approximately 50 percent of millennials live paycheck to paycheck, according to the same survey.
  • 46 percent of millennials believe that, despite inflation, their personal and household finances will get better in the next six months.

Values and “value” drive millennials’ retail and brand choices. Millennials care about brand values and quality, in some cases more than price, and are more likely to share their love of product on social media

  • 50 percent of millennials stated that they thought about brand values when making a purchase and consider it more important than price in a 2021 study by MullenLowe, and 56 percent stated that they trusted brands to put the public interest over profit.
  • “Clean,” “high quality,” and “durable” were the top three phrases most likely to encourage millennials to buy a product, according to a YPulse study.
  • Millennials are the generation most likely to share their passion for a brand via social media (42 percent do so), and 60 percent have used a brand’s social media presence to contact customer service, according to a study by Sprout Social featured on Content Science.

The Takeaways:

Millennials have matured—they have adult responsibilities and a keen sense of value for money and are concerned about how their purchasing choices reflect their beliefs. Reimagining your marketing strategy around millennials means creating an active social listening campaign to understand what makes a product or service relevant to this audience and connecting with the influencers who reflect millennial values and passions. Marketers seeking to engage millennials should understand how much “who” they are matters to how they spend.

We’ve Got Issues: Why The Media Is Highlighting ESG Leaders

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For media, many things matter when quantifying the impact of content, marketing or branding success. First, there’s the product, service, or content itself—does it work? Is its value evergreen? There’s the brand legacy—does its product or service translate to modern times? Does it still fill a need?

And then there’s how the brand fits into the real world and what matters to consumers: does this brand represent the kind of world that consumers feel comfortable in: Does it reflect what consumers care about? Each component of a campaign or marketing strategy needs to answer each question with a resounding “Yes” to stay relevant in a world where some things—like social issues—can matter more to consumers than the convenience or familiarity of the product itself.

The new “Hot or Not” lists

Recently, fashion and lifestyle magazine Allure published an article with the headline “Does your favorite beauty brand support abortion rights?” The article referred to a post from corporate social responsibility consultancy BSR, which reported research from ABC News and The Washington Post showing that 75% of Americans surveyed believe that reproductive decisions should be left to a woman to decide. In addition, the Allure article highlighted the Don’t Ban Equality pledge, signed by more than 180 CEOs, highlighting corporate commitment to women’s reproductive choice.

Gone are the days when “neutrality” is the safest bet for major content brands: leading publications are wading into politics and encouraging corporations to line up on one side or another of issues dominating American discourse.

For brands, silence can be risky—especially when popular media outlets may actively “name and shame” organizations that fail to respond to decade-defining cultural and political shifts, like the Dobbs decision.

Reproductive rights are not the only issue galvanizing consumers and inspiring media callouts.

British Glamour recently published a list of brands in the beauty industry that it deemed were not “cashing in on the Pride movement.” Likewise, CNN Underscored posted “16 LGBTQ-owned beauty brands for inclusive skincare, makeup and more”, an article that implored readers not to “fall for the rainbow-covered corporate pinkwashing, and instead try to support independent brands led by the LGBTQ+ community.”

Lists of brands with standout records on other social issues, like diversity, are becoming as ubiquitous in fashion and lifestyle media as “Hot or Not” lists were in the 90s.

Elle magazine and Marie Claire began highlighting the disparity between Black consumers’ spending on beauty products and their lack of representation in the boardroom (only 2.5 % of beauty brands are owned by people identifying as Black).

Issue awareness and alignment may be table stakes for brands seeking to engage millennials and Gen Z

With 43% of millennials identifying as Black, Hispanic or Asian and 22% as two or more races, leading beauty publications are responding to a significant generational shift and presenting new opportunities for brands to reach audiences that have been overlooked for decades.

In fact, 70% of consumers in one study stated that they believed it was critical for brands to speak up about political and social issues that reflect their values. In another study, 73% of consumers stated they wanted brands not just to say they supported an issue like Black Lives Mater but to demonstrate that support with action. In addition, Gen Z consumers are even more adamant than earlier generations that brands commit to issues that they feel are important to their world: 90% believe brands should act to address social and environmental issues, and 75% do their own research to ensure brands that they connect with aligning with their values.

Brands that want to engage new audiences and do social good should avoid standing up and being counted for issues they are not actively involved in or willing to commit to. Saying “We support cause XYZ” is nice, but not having much to show for it is worse than staying on the sidelines.

The Future of Marketing & Strategic Communications Through Education With NYU’s Michael Diamond

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Michael Diamond’s unique background marries science, the arts, and business. As Academic Director and Clinical Assistant Professor of Integrated Marketing and Communications at New York University, his view on the future of marketing is fascinating and incredibly on point.

In this episode, Michael and I talk about his pathway to academia and, most importantly, the new master’s degree program at NYU focusing on getting marketing and strategic communication professionals to the C-Suite. The advisors are stellar, the curriculum unassailable, and the access to the list of incredible minds is unmatched.

In this episode, you’ll learn:

  • The pillars of the new executive program at NYU and the future of marketing
  • The nuances of PR and Marketing and what marketers can learn from PR
  • The personal and professional benefits of investing in your education

Key Highlights:

  • [02:58] Michael’s career journey
  • [08:19] Michael’s role at NYU School of Professional Studies
  • [12:02] NYU’s new Executive Masters program for Marketing and Strategic Communications
  • [16:08] The curriculum of the new executive program
  • [25:00] NYU’s faculty and the advisory board for a new degree program
  • [27:33] What Michael thinks it takes to be successful
  • [31:00] An experience that defines Michael
  • [33:39] Michael’s advice for his younger self
  • [34:32] What marketers should be learning more about
  • [37:38] Brands and causes that Michael feels we should be taking notice of
  • [41:10] The biggest opportunity and threat for marketers today

Resources Mentioned:

Follow the podcast:

Connect with the Guest:

Connect with Marketing Today and Alan Hart:

Alan B. Hart is the creator and host of “Marketing Today with Alan Hart,” a weekly podcast where he interviews leading global marketing professionals and business leaders. Alan advises leading executives and marketing teams on brand, customer experience, innovation, and growth opportunities. He has consulted with Fortune 100 companies, but he is an entrepreneur at his core, having founded or served as an executive for nine companies.

Mapping The Trends: From Influencers to Influence Marketing

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From Influencers To Influence Marketing: The New “Studio System” For Multi-Platform Content

The nature of influencer marketing is changing in response to consumers’ new ability to exert granular control of their content and ad personalization experiences. This year, advertisers are increasing their ad spend cautiously after a blockbuster year in 2021. Even content-driven businesses like movie studios are spending less on traditional media like TV ads and more on non-traditional media services like digital and analytics and branded content creation. As a result, nontraditional media now forms the bulk of billings at The Big Three media agencies (WPP, Omicron and Publicis Groupe), showing a growth rate of 20% in the first quarter of 2022, per MediaPost.

Those “nontraditional” services include influencer marketing. Advertisers have been projected to spend more than $15 billion on influencer marketing in 2022, representing a 65% increase over 2020’s $9.8 billion.

Today’s Brands Are Reimagining Influence As A Brand-Audience Collaborative Story

According to the Association of National Advertisers (ANA), influence is not merely a quality associated with a celebrity or a tastemaker, rather, it is a form of value that can be quantified, tracked and optimized in the same way that clicks can be translated into CPM. As a result, the organization recently introduced guidelines for brands and agencies to monitor influencers’ impact on their businesses and their clients’ success.

As consumers’ attention is drawn to an ever-widening vista of content types, brands are reimagining the boundaries of storytelling and the concept of influence itself. Content brands are now seeking influencers not just based on preexisting celebrity but how the content they produce aligns with what consumers are watching and interacting with regularly. Consequently, influence has become its own story—one that is less about personality and celebrity and more about the key drivers of engagement: ideas, values and shared priorities.

Brands Are Looking Beyond A Single Platform Or Medium Strategy

In the early aughts, AI-powered predictive algorithms made personalization features commonplace on social platforms and streaming services. This allowed marketers to glean insights into how consumers interacted with—or ignored—content, which allowed them to create campaigns that seemed more personal and driven by human preferences and not marketing goals.

Influencers often helmed social media-born ad campaigns that used content as a gateway to multi-platform experiences. Consumers read more, watched more and “liked” more when the content they viewed from influencers aligned with what consumers’ search data, purchasing patterns and social posts indicated they wanted to see. That made influence less about individual personalities and more about content communities, as consumers engaged with narratives that matched their values, passions and in-the-moment needs.

Influencers Are Human-To-Algo Translators

Over the past few years, the most powerful influencers have driven engagement because they embodied the audience’s story—the meaning locked within their search, purchasing and social media data. They make the data human-readable and actionable. When influencers fail to embody the zeitgeist, they often lose followers quickly. It’s not just about trending tastes but about missing what drives consumer engagement: Values, needs, wants, and aspirations that are individual but also communally shared.

Where We’re Going: Influence As An Ecosystem

Brands and agencies are catching on to influencers’ value proposition, like reflecting and amplifying community values, passions and specific, authentic needs. They’ve begun to mimic influencers’ multi-platform communications skills and look at what drives human interest, not just purchasing behavior. Influencers’ unique personalities and methods of connecting with followers will always matter, but their usefulness to consumers is limited to their capacity to evolve and respond as community tastes and priorities change. Brands and influencers can work together successfully when they can reflect the stories consumers tell through their engagement with content and products—and those stories rarely live on a single platform or device. That makes influencers excellent guides for brands seeking to stand out in a crowded marketplace, as savvy influencers help brands get better at communicating their value and consumers respond to influencers’ interpretation of that value by connecting with the content that compels them to engage.

TikTok, Kids And Healthy Eating: What Matters To Brand Marketers When the Rules Don’t Apply

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TikTok first outpaced YouTube as Gen Z’s and Gen Alpha’s go-to video platform in 2020, and it remains so in July 2022. That has made the platform not just a competitive target for YouTube but also a focal point of concern for researchers who report that TikTok regularly presents content that promotes unhealthy eating habits. Those findings are a problem for brand marketers who sell snacks and fast food and leverage the platform’s popularity to introduce products to new audiences.

Marketing To Children Without Marketing To Children: Rules, Research And Controversy

While COPPA imposes strict requirements on how advertisers can target children under 13 and what platforms can do with their data, TikTok, like YouTube, states that users must be 13 or over to log in and use the site. So now TikTok, just like its forebear YouTube—which has faced litigation from nonprofits and parents’ advocacy groups over children’s ability to access the site and the site’s alleged collection of data on their viewing habits—is under scrutiny.

TikTok, like YouTube, allows anyone to watch videos without registering. While you must affirm that you are over 13 to sign up for an account, there’s no way to stop a teen’s younger sibling from watching over their shoulder or simply using their device. That means that non-explicit content available to adults is open to children, and brand marketers who engage young adult influencers to issue challenges or create content with their products, healthy or not, aren’t marketing to kids directly, and therefore not in violation of COPPA. That said, there is plenty of evidence that kids are watching and engaging with content designed to promote fast food and snack brands with high fat, salt and sugar content.

According to a report issued by BMJ Global Health:

“Unhealthy food and non-alcoholic beverage brands are using TikTok to market brands and products via their accounts and to encourage users to create and share their content that features branding and product images.” The report stated that some brands were marketing their products to encourage users to purchase and consume products for challenges.

“The most common marketing strategies were branding (87% of videos), product images (85%), engagement (31%) and celebrities/influencers (25%). Engagement included the instigation of branded hashtag challenges that encouraged creation of user-generated content featuring brands’ products, brands’ videos and/or branded effects. The total collective views of user-generated content from single challenges ranged from 12.7 million to 107.9 billion. Of a sample of 626 brand-relevant videos generated in response to these challenges, 96% featured branding, 68% product images and 41% branded effects. Most portrayed a positive (73%) or neutral/unclear (25%) sentiment, with few negative (3%).”

TikTok’s Privilege Is Its Ability To Engage—It’s Also Marketers’ Biggest Challenge

Of course, promoting products is what brand marketers do; they attempt to drive engagement in creative ways. And, like platforms built around user-generated content, brand marketers try to avoid breaking the law. For example, TikTok and YouTube require users to register to post videos but not to watch them, and there’s no way to vet who is behind an email address—unless some form of digital identity verification system is introduced that limits access to specific types of content, like porn. But that may not work, even if such a system was technically feasible. Ever met a teen who’s seen content intended for an 18+ audience? Ever met a teen who’s tasted a beer? It’s unlikely that fast food or salty snack-related content will ever be considered adult-only since neither can be considered age-restricted products.

There is also the matter of TikTok’s raw power to engage users. A familiar example of TikTok’s influence is that, at one point, Jennifer Lopez posted the same video on Twitter and TikTok. Her TikTok video gained 71 million views from 5 million followers, and her Twitter video received only 2 million views from 45 million followers.

TikTok makes sense for brand marketers, but it also needs to make ethical sense.

Here is a list of resources from the ANA regarding best practices for marketing on platforms with younger audiences:

From the FTC:

From the ANA: