BIA: OTT Local Advertising To Top $2B In 2022

A new research report from BIA Advisory Services finds that over-the-top (OTT) is one of the fastest growing channels for local media and increased at a rate of 43% compound annual growth from 2020 to 2022. Sponsored by Vevo, the report, OTT – The Rising Star in Local Ad Spending: Regional and Business Vertical Trends, shows that BIA forecasts just over $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. BIA defines OTT ad spend as comprising ad spending targeting local viewers of long form premium video content delivered via the Internet.

“The sheer growth and volume of OTT impressions has taken the local OTT channel from a fill-in audience reach extension play to a full-fledged marketing channel,” said Rick Ducey, managing director and report author, BIA Advisory Services. “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.”

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 performance of campaigns.

BIA organized its local OTT forecast data in five geographic U.S. regions. 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 percent CAGR.
• Northeast has the second highest growth rate at 47 percent CAGR.
• Pacific Southwest and Pacific Southeast regions show growth just below the overall average of 42.7%.

Growth Rates in OTT Ad Spend by Region (% CAGR)

Source: BIA Advisory Services, Local Market Ad Forecast, Issued June 2022

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 $337.2 million across all U.S. regions in 2022. General services businesses in the Southeast region will spend the most ($105.7 million) on local OTT. The report also details spending in the automotive, restaurant, health, and finance/insurance verticals.

A full list of topics covered in the report include:

• 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 business verticals are spending in OTT.
• Case studies on multimarket activations within the automotive and restaurant verticals (provided by Vevo.)

“The data and insights that BIA provides in the report show the efficacy of local OTT as a competitive and powerful marketing channel,” said Liz Baxter, Vevo director of local advertising. “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.”

Find the full report here.