Local TV Stations' OTT Advertising Forecast To Rise 57%, OTA Still Leads

• by Wayne Friedman , 10 hours ago

Although U.S. local TV stations' over-the-top (OTT) advertising continues to grow sharply -- estimated to be 57% higher in 2022 to $2.0 billion versus 2021 ($1.3 billion) -- legacy over-the-air advertising continues to dominate, with $20 billion plus revenues.

According to BIA Advisory Services, over-the-air (OTA) local TV advertising continues to post gains -- although at a much slower pace -- on its traditional two-year cycle, where major political and Olympics ad buying occurs every other year.

BIA estimates that traditional over-the-air advertising will hit $20.4 billion in 2022 -- rising to $21.1 billion in 2024 and $21.9 billion in 2026 -- while local TV station OTT advertising will grow 40% to $2.8 billion in 2024 and 21% to $3.4 billion in 2026.

BIA says that during the period from 2019 to 2022, OTT ad spending grew at a 33% compound annual growth rate (CAGR).

Looking ahead, for the period from 2022 to 2026, BIA estimates that local OTT will continue to climb at a slower 14.3% CAGR.

Specific advertising categories buying into local TV stations' OTT platforms, BIA says, include supermarkets/grocery stores; quick-service restaurants (QSRs); physicians, dentists and chiropractors; legal services; and fitness and recreational sports centers.

Rick Ducey, managing director of BIA Advisory Services, said in a release that although OTA advertising remains a strong business for local TV stations, “the growth in OTT demonstrates that it is delivering a proven opportunity for broadcasters to grow revenue... Consumers continue to shift, and are sticking with, viewing habits supported by OTT.”