BIA Projects Strong Ad Growth With OTT In Local Markets Leading To More Programmatic Buys

Media BIA Projects Strong Ad Growth With OTT In Local Markets Leading To More Programmatic Buys Brad Adgate Contributor Opinions expressed by Forbes Contributors are their own. Brad Adgate is an Independent Media Consultant Following New! Follow this author to stay notified about their latest stories. Got it! Oct 6, 2022, 01:42pm EDT | New! Click on the conversation bubble to join the conversation Got it! Share to Facebook Share to Twitter Share to Linkedin OTT has become the fastest growing ad medium in local markets.

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[+] Washington Post via Getty Images) The Washington Post via Getty Images BIA Advisory Services released their latest local ad spending report for 2022 forecasting ad dollars to reach $167. 4 billion for the year. When broken out; digital media will generate $79.

5 billion in ad dollars this year and traditional media will total $87. 9 billion. Driven by digital media, BIA projects local ad spend to surpass $200 billion in 2026.

By then, local digital ad spend is projected to reach $116. 6 billion compared to $93. 6 billion for local traditional media.

Hence, by 2026 digital media will garner over half (55%) of all local ad spending. This year, with a contentious political landscape and control of both houses of Congress at stake, a projected $8. 6 billion in political advertising will be spent on local media.

Of that total, broadcast television will collect $3. 8 billion. By far, the fastest growing segment in local media ad spend will be OTT.

In 2022 the digital video platform will have a year-over-year bump of 57. 4%. This year, political candidates have been heavily investing in OTT ads (in a first, this year CTV will exceed local cable in political ad dollars), other leading product categories advertising in local OTT are: · Businesses in the large general services vertical (i.

e. , legal, plumbers and HVAC, utilities, funeral homes and more) are the highest spenders at $337. 2 million.

· Automotive ranks second at $273. 2 million as carmakers recover from the global chip shortage. · Rounding out the top five restaurants ($203.

4 million) followed by health ($202. 8 million) and finance/insurance ($182. 8 million).

As a result, local OTT ad dollars are expected to exceed $2. 0 billion for the year, more than double from 2020. In addition, local OTT ad spend annual average growth over the next four years is forecast to be 14.

3%, ranking second to TV owned and operated streaming and local station websites. OTT ad dollars is projected to total $3. 5 billion by 2026.

MORE FOR YOU They Inherited Billions Upon Billions: Meet America’s Richest Heirs Can Bears Offensive Line Survive Without The Guy Making Big Money? Agroforestry Is Going To Be The New Buzz Word In Coffee (BIA uses the terms “OTT” and “CTV” interchangeably. However, CTV is a subset of OTT video impressions that come specifically from Connected TVs. CTV impressions typically account for 90% or more of OTT viewing and ad buying.

) Moreover, from 2022 to 2026, local broadcast TV ad spending as a share of total local video ad spending will decline from 51. 2% in 2022 to 41. 7% in 2026.

Also, over the same four years, local cable TV ad spend will drop from 16. 2% this year to 12. 5%.

Conversely, in the upcoming years, every local digital video platform will have an increase in ad dollars. For example, video display ad spending on laptops/PC is expected to nearly double from 13. 8% share in 2022 to 22.

6% share in 2026. The shift to local digital video has been driven by several trends; continued cord cutting, digital’s younger audience profile, ability to for ad campaign attribution, measuring business outcomes and its enhanced targeting capabilities among other attributes. Moreover, as OTT becomes more scalable, marketers that had once used OTT strictly as a reach extension, are now using OTT as a standalone component of their overall marketing strategy.

Hence, OTT is not only a complement but also a competitor to other video platforms. For years traditional and linear media buying at ad agencies and selling groups at TV stations were separate groups. As OTT continues to grow that has been changing.

Nowadays, a local TV station can provide advertisers with access to its audiences with traditional over-the-air and via their owned and operated digital platforms; such as web sites, mobile apps, podcasts, CTV or streaming. To help maximize ad dollars local stations are seeking more data-driven ad negotiations to sell their premium video content across linear television and digital platforms. As a result, it is expected by next year programmatic (automated “real-time”) bidding in local market buying will triple from 2019.

Rick Ducey, Managing Director, BIA Advisory Services who wrote the report says, “The CTV local ad marketplace is very dynamic with established SVOD (subscription video on-demand) players expanding into the AVOD (ad-supported video on-demand) segment with options for new ad-supported tiers. This includes premium brands such as Netflix NFLX and Disney. These moves provide marketers and agencies with much broader and deeper access into the CTV audience where more viewing can now be targeted with ads.

CTV is a powerhouse combining the data and targeting capabilities familiar to buyers in digital media with the premium, long-form, engaging and brand safe content that consumers love. CTV impressions trade both direct and programmatically to provide buyers flexibility in addressing their requirements. CTV marries the power of digital and TV in ways the marketplace is still absorbing.

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