CHANTILLY, Va.—BIA Advisory Services’ U.S. Local Advertising Forecast is predicting that local over-the-top (OTT) advertising will jump 57% in 2022 to $2 billion in 2022 and hit $3.4 billion in 2026, making it the fastest growing local media channel.
By comparison, over-the-air ad revenue remains much larger at $20.4 billion in 2022 but will grow at a slow rate to $21.9 billion in 2026.
The BIA released the forecasts at the TVB Forward 2022 conference.
“When you compare TV over-the-air (OTA) to OTT, obviously TV OTA is the juggernaut. However, the growth in OTT demonstrates that it is delivering a proven opportunity for broadcasters to grow revenue,” said Rick Ducey, managing director, BIA Advisory Services. “Consumers continue to shift, and are sticking with, viewing habits supported by OTT. For broadcasters taking notice, it offers them an opportunity to extend the value of their traditional over-the-air content and deliver it in a manner consumers require.”
In the new forecast, the BIA noted that during the main portion of the pandemic (2019-2022), OTT ad spend grew at a 33% compound annual growth rate (CAGR) and it is projecting that local OTT will continue to grow at a 14.3% CAGR from 2022 to 2026.
In this busy political year, advertisers are using OTT at greater rates. BIA expects to see an extra bump in OTT spending particularly in even years as advertisers decide to mix more of this channel into their cross-platform approach to advertising.
BIA researchers also explained that other local verticals starting to use OTT at noticeable levels include:
- Supermarkets and Other Grocery Stores
- Quick Service and Fast-Food Restaurants
- Physicians, Dentists and Chiropractors
- Legal Services
- Fitness and Recreational Sports Centers
“As OTT comes of age, we expect it to rapidly seek additional investments to reach new consumers that are harder to hit by linear TV alone. It will be fascinating to watch the growth trend lines,” explained Nicole Ovadia, vice president of forecasting and analysis at BIA Advisory Services. “To provide insights into OTT ad spending, we are slicing and dicing our forecast estimates to examine growth and expansion by verticals, regions in the US, by markets and more.”
At TVB Forward, Ovadia and Ducey participated in a BIA-lead panel called "Monetizing Local OTT and Apps." As part of the session, BIA offered a complimentary report examining regional OTT ad spend that is available for download here.
BIA’s U.S. Local Advertising Report covers 16 ad channels (i.e., TV OTA and Digital, Radio OTA and Digital, PC/Laptop, Mobile, OTT and other) and tracks expected ad revenue across 96 verticals.
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George Winslow is the senior content producer for TV Tech. He has written about the television, media and technology industries for nearly 30 years for such publications as Broadcasting & Cable, Multichannel News and TV Tech. Over the years, he has edited a number of magazines, including Multichannel News International and World Screen, and moderated panels at such major industry events as NAB and MIP TV. He has published two books and dozens of encyclopedia articles on such subjects as the media, New York City history and economics.