While OTT television viewing is overtaking linear TV, advertisers have yet to exploit local OTT advertising potential completely.
Local advertising spending on OTT is expected to touch $1.2 billion in 2021. On the other hand, Linear TV will account for $15.7 billion. Publishers sell 76% of their inventory directly to advertisers, mostly national advertisers. This preference for national advertisers means streaming services are losing out locally.
Local businesses are in fact, shifting ads to mobile and online channels, which made up for $47.7 billion of local ad spend this year. But while local advertisers value the advantages of high-tech targeting on these channels, they dislike the irrelevant and low-quality user-generated content the ads are placed next to.
OTT buying solutions that exist today are for national advertisers, but they need to tend to local advertisers as well. This is crucial since less than 10% of small to midsize local TV and video advertisers have used OTT.
[4 minute read]