The value and impact of Over-the-Top (OTT) for audience reach extension are being much better recognized and quantified. BIA forecasts that advertising spending on OTT will reach $2.2B by 2023 and $3.4B by 2026. Simultaneously, there is significant growth in programmatic buying that delivers access to a network of OTT ad inventory from a variety of publishers.

These topics are the focus of the report, The Local Programmatic Marketplace: OTT and Digital Reach Extension Channels, sponsored by Madhive, the technology company engineered for modern TV advertising. The report examines the programmatic marketplace by looking at expectations for OTT growth and detailing findings from executive interviews with publishers, agencies, and solution providers on the topic of programmatic.

A main theme of the report examines the changes in how local TV and OTT have operated. Until recently, local TV and OTT have been separate , each with its own culture, dynamic, and different levels of automation. This is however changing as the marketplace moves to a much faster innovation rate than anytime prior.

BIA’s local video advertising forecast reflects this shift showing that digital media is growing much faster in contrast to traditional, with video display advertising on Laptop/PC almost doubling from 2022 to 2026.

Based on our conducted research and interviews, the report shows that though owned and operated direct sales on OTT were central in earning better margins, programmatic channels had overall better opportunities and real-time trading in making revenue at scale. Other benefits of programmatic include fraud protection, frequency capping, attribution, and many more.

As highlighted by Rick Ducey, Managing Director at BIA Advisory Services and a report author, “Programmatic trading is fast becoming the new norm because it empowers data-driven automated platforms to manage real-time and forward reserve bidding that matches publisher inventory with ad buyer targeted consumer segments at sufficient scale and at mutually agreeable price points.”

However, sellers and buyers emphasized to us the need to better understand this marketplace in terms of workflow and transparency in order to best optimize marketing campaigns. Other challenges are also present when it comes to measurement, attribution, and lack of industry standards.

In terms of verticals that advertise on OTT, BIA’s U.S. Local Ad Forecast aligns with the interview findings shared by local TV group top digital executives.

The automobile industry, especially Tier 1-Automotive Manufacturers and Tier 2- Local Automobile Dealers Associations, are the biggest investors in programmatic buys. As explained to us during the interviews, most of these dollars are coming from Covid held opportunities. Next, Healthcare Services and Legal Services are also on the rise in programmatic advertisements. The report offers dollar spend estimates for these verticals and others on OTT.

A full list of topics covered in the report includes:

• Market shifts to digital ad platforms
• Status of local programmatic
• Views from the field: Executive interviews
• Top business verticals spending in OTT
• BIA’s local ad forecast 2022-2026
• Buyer and seller recommendations

Overall in the industry there is agreement that local OTT is increasingly becoming the go-to platform, especially for premium video streaming options. Based on our assessments of the OTT marketplace, both buyers and sellers need recommendations on best next steps and this report works to offer that important information.

Report Download and Podcast

Click to download the report, The Local Programmatic Marketplace – OTT and Digital Reach Extension Channels. Plus hear more on the topic when we discuss Simplifying Programmatic Advertising with Madhive’s Joe Marino in a recent podcast. Click to listen now.

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 info@bia.com for more information