Local OTT ad revenue will hit $2.8 billion in 2024
CHANTILLY, Va.—BIA Advisory Services’ U.S. Local Advertising Forecast forecasts that local over-the-top (OTT) advertising will jump 57% in 2022 to $2 billion in 2022 and reach $3.4 billion in 2026, making it the fastest growing local media channel.
By comparison, live ad revenue remains much larger at $20.4 billion in 2022, but will grow at a slow pace to reach $21.9 billion in 2026.
The BIA released the predictions at the TVB Forward 2022 conference.
“When you compare over-the-air TV (OTA) to OTT, it’s obvious that OTA TV is the juggernaut. However, the growth of OTT demonstrates that it offers broadcasters a proven opportunity to increase revenue,” said Rick Ducey, Managing Director of BIA Advisory Services. “Consumers continue to change and retain the viewing habits supported by OTT. For broadcasters who become aware of it, it offers them the opportunity to extend the value of their traditional content live and deliver it in the way that consumers demand.
In the new forecast, the BIA noted that during the main part of the pandemic (2019-2022), OTT ad spend grew at a compound annual growth rate (CAGR) of 33% and it forecasts that local OTT will continue to grow at a CAGR of 14.3% from 2022 to 2026.
In this busy political year, advertisers are using OTT at higher rates. BIA expects to see a further increase in OTT spending, particularly in even-numbered years, as advertisers decide to further integrate this channel into their cross-platform approach to advertising.
The BIA researchers also explained that other local verticals starting to use OTT at notable levels include:
- Supermarkets and other grocery stores
- Quick service restaurants and fast food
- Doctors, dentists and chiropractors
- Legal services
- Fitness and recreational sports centers
“As OTT matures, we expect it to quickly seek additional investment to reach new consumers who are harder to reach through linear TV alone. It will be fascinating to watch the trend lines growth,” explained Nicole Ovadia, VP of Forecasting and Analytics at BIA Advisory Services. “To provide insights into OTT ad spend, we slice and dice our forecast estimates to look at growth and expansion. by verticals, regions of the United States, by markets and more.”
At TVB Forward, Ovadia and Ducey participated in a BIA panel titled “Monetizing Local OTT and Apps”. As part of the session, BIA offered a free report examining regional OTT ad spend which is available for download here (opens in a new tab).
BIA’s US Local Advertising Report covers 16 advertising channels (i.e. OTA & Digital TV, OTA & Digital Radio, PC/Laptop, Mobile, OTT and Others) and tracks ad revenue expected in 96 verticals.