Advertising Optimism for 2022

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Before the pandemic, some predicted a decline in local television viewing, pointing to the rise in popularity of streaming services and other web-based entertainment options. But for two years, American viewers have endured the ups and downs of COVID-19 planted firmly in front of their television sets. They're tuning in to local newscasts and programming to stay informed and maintain a sense of community connection.

The increase in viewership enjoyed by direct-to-consumer portals like Hulu, Netflix, and AppleTV is a reality. But there's every indication that local broadcast TV will remain strong in 2022. Many people are still working from home at least part of the time and will continue to do so for the long term as hybrid work models become the norm. They rely on their local news for information on current events, such as the changing pandemic situation and, crucial in 2022 local, state, and federal elections. 

The 2020 presidential election was an advertising juggernaut, with $9.5 billion in political ad spend across local broadcast and cable TV and digital video. Even without a presidential race, this year’s hotly contested midterm elections are expected to bring in $8,8 billion, a 125% increase over the 2018 elections. And more than half of those political advertising dollars will go to local TV stations.

Marketplace TV gaining traction
Over-the-top (OTT) and Connected TV (CTV) now account for 24% of TV consumption, up from 19% in 2019. Ad spend for CTV is expected to exceed $19 billion this year, an increase of 32% over 2021. And over half of those dollars will be transacted programmatically.

The advanced targeting capabilities available with OTT and CTV mean broadcasters can offer advertisers the extensive reach of their broadcast inventory alongside the targeting of digital. Programmatic marketplaces make ad-supported streaming inventory easy to access and affordable to buy, making it a desirable option for advertisers.

But marketplace transactions aren’t just for digital TV. The rapid evolution in programmatic advertising makes it easier for advertisers to include broadcast TV in their advertising mix, allowing TV stations to attract more advertising dollars. This year, the ease of execution, waste reduction, brand safety, and rate transparency of marketplace transactions will attract a growing number of advertisers, especially as broadcasters continue to improve their marketplace experience. 

The rapid evolution in programmatic advertising makes it easier for advertisers to include broadcast TV in their advertising mix, allowing TV stations to attract more advertising dollars.

As a result, the marketplace for programmatic purchasing of broadcast ads will grow significantly in 2022, bringing the industry closer to true convergence, where over-the-air, broadcast inventory and digital advertising can be purchased together through a seamless user experience.

Consolidation is coming
The past year saw the launch of several new direct-to-consumer streaming services, all hoping for a share of $25+ billion in annual revenue. Portals even exist for streaming local news broadcasts, giving consumers more choice than ever for how and where they access their news. 

A highly saturated market is causing increased audience fragmentation, especially as consumers struggle to balance subscription-fee overload with creating the right combination of services to access the programming they want, making free, ad-supported options increasingly attractive. 

As a result, a move toward more ad-supported streaming and consolidation among even some of the most prominent players in the space are all but inevitable. 

Addressable TV is growing
Addressable TV advertising is expected to generate about $7.5 billion globally in 2022. However, while that number is impressive, it’s still only a small percentage of the total TV advertising forecast of $153 billion. This year's focus will be on building the technical infrastructure that TV broadcasters need to sell, manage, execute, and measure addressable ads alongside more traditional digital advertising and over-the-air broadcast spots. 

The ability to offer advertisers cross-platform, addressable advertising is critical to creating the holistic reach extension necessary for traditional TV broadcasters to remain competitive in an increasingly fragmented market, especially with continued growth expected across CTV, FAST, AVOD, and NextGen TV.

Will Offeman
Chief Product Officer, WideOrbit

Will Offeman is chief product officer with WideOrbit, where he leads strategy, design, and development of all its software solutions. With decades of professional experience in broadcasting, cable networks, and digital publishers, Offeman focuses on advancing digital and linear advertising. On LinkedIn.