It’s no big secret local advertising is on an upswing—and that OTT is playing a significant role in the growth. But just what kind of upswing are we looking at? How can buyers and sellers take advantage of it? And what ongoing challenges exist in the market?
We teamed up with BIA Advisory Services on some research to find out—here are some of the top OTT statistics and takeaways.
First things first. What, exactly, does OTT mean? And how does it differ from CTV? These terms are often used interchangeably, but technically, CTV is the subset of OTT advertising in which video content is played on a connected television screen.
The local advertising marketplace will reach $167.4 billion in 2022 as local, regional, and national buyers alike compete to bring their messages to local audiences.
While TV and cable still earn the lion’s share of local video ad spending, the momentum is shifting to digital video ad formats. Between now and 2026, local TV spending will decrease by nearly 19%, and local cable will decline by almost a quarter (23%).
On the other hand, all digital video ad platforms are in growth mode.
The fastest-growing media segment is OTT with an annual growth rate of 57% in 2022. BIA expects OTT spending to exceed $2 billion in 2022—and this will increase to $3.5 billion by 2026.
Some industries are leaning into this new wave of OTT more than others. These industries will see the most growth in spend between 2022 and 2026.
Related content: Auto Dealership Marketing: 5 Reasons to Add CTV to the Mix
Cord cutting continues to be a clear and present danger to linear TV. As more and more viewers move to streaming video, broadcast may not provide enough eyeballs for big advertisers. OTT plays a critical role in reach extension, providing broadcast stations and their buyers with additional publishers when local TV impressions aren’t sufficient.
One local TV group executive BIA interviewed sings the praises of OTT and programmatic trading to better serve his clients—and grow beyond his broadcast sales. His station aggressively markets audience extension through programmatic OTT. With this strategy, his station has grown its digital revenue to 25% of total revenue, and this has been growing up to 20% annually.
For buyers and sellers that want to get in on the local OTT action, the OTT marketplace operates in two primary trading models.
By 2023 digital video programmatic trading will nearly triple from 2019 to reach more than half (53%) of all digital display programmatic trading. Why? There’s plenty of upside.
While OTT advertising is on the rise, many buyers and sellers alike still don’t know much about it. The market needs education, including around the following gaps BIA identified.
Dive deeper into all of these OTT stats in our full research report. Check it out here: The Local Programmatic Market: OTT and Digital Reach Extension Channels
