In the latest projections for local advertising revenue for 2023, one tactic continues to look impressive — OTT/CTV (over-the-top/connected TV). BIA Advisory Services forecasts that local OTT/CTV advertising spending will grow by 12.3% in 2023. That’s a bright spot in expectations, as many other areas will decrease or remain flat, including TV and radio OTA (over the air).
What it signals to broadcast media sellers is opportunity. In 2022, OTT/CTV at the local level received a jolt of political spending. This won’t occur in 2023, yet numbers are steadily increasing. What 2022 did for the market was prove that OTT/CTV is a viable channel to reach targeted audiences by geography, demographics and interests.
It’s a tactic prime for expansion and engagement. Let’s find out why.
OTT/CTV Reaches Targeted and Attractive Consumers
OTT/CTV brings the targeting of digital to traditional ad delivery. It helps reach cord-cutters, a growing category of consumers who no longer subscribe to cable or satellite. It enables advertisers to hypertarget audiences based on behaviors and interests, ZIP codes, state, DMA (designated market area) and household demographics (OTT only).
In the content ecosystem, OTT/CTV simply changes how people consume media. According to data, 60.5% of millennials had connected TVs in 2022, with Gen Z and Gen X at 49.6% and 51%, respectively.
Additionally, most of these viewers prefer ad-supported streaming. In these formats, they can’t skip or fast-forward the spots. It’s a somewhat captive audience that you have the potential to target for advertisers.
All these advantages make it easy to see why the CAGR (compound annual growth rate) for OTT is 28.8% through 2023.
Who Is Spending on OTT?
Many industries have shifted budgets to OTT from traditional and digital channels. The BIA 2023 forecast cites several industries as prime to spend on the tactic in 2023, including:
- Performing arts
- Amusement parks
- Retail (grocery, clothing, big-box stores)
- Health care and pharma
- Legal services
Of these, legal services, hospitals, restaurants, auto manufacturers and supermarkets will be the top spenders.
The pitch and logistics will determine your ability to acquire new customers in these categories and get existing ones to expand OTT spending. Local advertisers have some familiarity with OTT, even if they’ve never used it. The objections to OTT often come down to making the content. Thus, you’ll need a message about how to do it with ease.
Handling Objections to OTT/CTV
You’ve likely heard from many local advertisers that they don’t have the means to create video content. Thus, they end the conversation. However, you can counter this objection by presenting them with solutions. It’s also a good idea to remind them of the value of OTT/CTV and that a failure to embrace it leaves it open for domination by competitors.
So, how do you solve the content objection?
- Find a local production company to be your partner that can facilitate video development at a reasonable price.
- Introduce business owners to online platforms with stock videos that are easy to customize and create.
- Advise them to repurpose old videos with some edits.
- Suggest they shoot the video themselves, and provide ideas for the message.
As streaming now dominates traditional viewing, your advertisers have a unique opportunity to expand brand awareness and acquire new customers. However, content isn’t their only concern.
Addressing Other Concerns
Your customers have more questions about OTT besides content. They may have further apprehensions about how it works. Explain to them that placing these ads is just like the structure for display ads.
Another point to make is that inventory in this channel is abundant. This translates to ads being more likely to accompany relevant programming. Because of better targeting, they also aren’t “wasting” impressions and are likely to see greater ROI as a result. They’ll know exactly how the campaign performed when you use a third-party digital platform that creates reports with metrics like total impressions, watch rates, clicks, CTR (click-through rate) and more.
OTT/CTV also has advantages over other digital tactics. Most of that has to do with the association of where the ad plays. In social media feeds, you don’t have much control over where an ad will play and if it’s alongside content that may be controversial or inappropriate. OTT/CTV is also a medium that engages the senses with visuals and sound, creating stronger recall connections versus text-only ads. All digital tactics can deliver value for advertisers, but if there is a debate on where to route dollars, OTT/CTV should be a top consideration.
OTT/CTV Local Advertising: Adopt a Plan to Prioritize This Category
The wave of local OTT/CTV local advertising is coming in 2023. Prioritizing selling it with a strategy and counters to objections puts you in an excellent position to earn more revenue. The reality is that this tactic is growing while others aren’t, so the opportunity to engage with advertisers is now!
Explore how OTT delivers results by reading an advertiser case study featuring the University of Illinois Springfield Performing Arts Center.