A new research report, commissioned by Vevo and written by BIA, reveals that ad spending in over-the-top (OTT) advertising is increasing at a rate of 43 percent compound annual growth from 2020 to 2022.
The report, OTT – The Rising Star in Local Ad Spending: Regional and Business Vertical Trends, shows that BIA forecasts over $2 billion in OTT advertising in 2022, up from just over $1 billion in 2020. This substantial growth gives OTT the distinction of being the fastest growing local advertising platform. BIA defines OTT ad spend as comprising ad spending targeting local viewers of long-form premium video content delivered via the Internet.
The report explains why OTT is so highly attractive right now. First, OTT offers the valuable and unique characteristics of being highly engaging premium videos within a brand-safe environment combined with data-driven marketing capabilities of digital advertising. Second, this blend also includes the ability to define and activate audience segments with first and third-party data and to target, optimize and measure the performance of campaigns.
As explained by one of the report’s main authors, Rick Ducey, Managing Director at BIA Advisory Services, the sheer growth and volume of OTT impressions have taken the local OTT channel from a “fill-in audience reach extension play to a full-fledged marketing channel. This growth is making OTT a top recognized channel capable of delivering local ad impressions at scale across demographics and market geographies.”
To offer a deeper dive into OTT ad spend, the report organizes BIA’s local OTT advertising forecast into five geographic U.S. regions to examine ad spend growth rates. Three takeaways from this research include:
1. The mid-Atlantic region has the highest growth rate for local OTT ad spend at 53 percent CAGR
2. Northeast has the second highest growth rate at 47 percent CAGR
3. Pacific Southwest and Pacific Southeast regions show growth just below the overall average of 42.7 percent
Growth Rates in OTT Ad Spend by Region (% CAGR)
Source: BIA Advisory Services, Local Market Ad Forecast, Issued June 2022
Also identified in the report are the verticals most utilizing OTT advertising. As the report explains, businesses in the large General Services Vertical (i.e., legal, plumbers and HVAC, utilities, funeral homes and more) are the highest spenders ($337.2 million) across all regions in 2022.
A full list of topics covered in the report includes:
· Analysis of key regional and business vertical spending trends in local OTT advertising
· Overview of how OTT is growing in different geographic regions in the U.S.
· Examination of what business verticals are spending in OTT.
· Case studies on multimarket activations within the Automotive and Restaurant verticals (provided by Vevo.)
“OTT – The Rising Star in Local Ad Spending: Regional and Business Vertical Trends,” a BIA Sponsored Research report, sponsored by Vevo, is available for free download here.
BIA Sponsored Research
BIA Sponsored Research is commissioned by companies that wish to spotlight timely issues, trends, and topics that have a bearing on the local media and marketing industry. BIA maintains full editorial control and applies its longstanding standards of editorial practice and objective market analysis. Companies interested in contracting BIA to cover a particular topic or profile sectors of local media innovation should email firstname.lastname@example.org for more information