Over-the-top is one of the fastest growing channels for US media and increased at a rate of 43% compound annual growth from 2020 to 2022, a new research report from BIA Advisory Services revealed. Sponsored by Vevo, the “OTT – The Rising Star in Local Ad Spending: Regional and Business Vertical Trends” report forecasts just over US$2 billion in OTT advertising in 2022, up from just over $1 billion in 2020. This substantial growth now gives OTT the distinction of being the fastest growing local advertising platform.
“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. Now, OTT is recognized as a channel capable of delivering local ad impressions at scale across demographics and market geographies, making it a highly competitive channel across all media,” said Rick Ducey, Managing Director and report author at BIA Advisory Services.
The attractiveness of OTT, as explained in the report, includes the valuable and unique characteristics of both highly engaging premium videos within a brand-safe environment that is combined with the data-driven marketing capabilities of digital advertising. 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.
BIA organized its local OTT forecast data in five geographic regions in the United States. Each region has demonstrated high growth rates since 2020, and offers three key takeaways: the mid-Atlantic region has the highest growth rate for local OTT ad spend at 53% CAGR; Northeast has the second highest growth rate at 47% CAGR; and Pacific Southwest and Pacific Southeast regions show growth just below the overall average of 42.7%.
The top spending business category in local OTT advertising is the General Services vertical (i.e., legal, plumbers and HVAC, utilities, funeral homes, and more), with expected revenues to reach US$337.2 million across all US regions in 2022. General Services businesses in the Southeast region will spend the most (US$105.7 million) on local OTT.
“The data and insights that BIA provides in the report show the efficacy of local OTT as a competitive and powerful marketing channel. As OTT continues to show itself as a win-win for advertisers, brands and agencies that want to target local audiences have a valuable new media channel to add to their advertising mix,” said Liz Baxter, Director of Local Advertising at Vevo.
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