Plano, Texas-based Diffusion Group says that by 2020, OTT TV ad revenue will be approximately $40 billion -- just under half of 2020’s projected $85 billion in total TV ad revenue.
Some of this is due to growing advertising time in a typical 30-minute OTT program -- which will rise 63% to 5.1 TV commercials in five years, from 3.7 TV commercials currently.
Other studies have shown that premium digital TV video can see cost-per-thousand prices [CPMs] that are one-and-a-half to two times that of traditional TV network advertising inventory.
At the same time, the Diffusion Group says
the average ad load for a 30-minute traditional linear TV program will decline by 38% by 2020, to about 5 minutes from 8 minutes.
This is not particularly bad news for traditional linear TV networks.
Diffusion Group says the value of linear TV advertising “in 2020 will be worth considerably more than today," and adds that new forms of TV advertising including native and other special sponsored promotions will generate new revenue to keep total TV ad revenue stable.