Local Political Ads Expected To Boost OTT Ad Growth

Local political advertising is poised to boost advertising spend on over-the-top video environments, according to a case study released today by the video advertising platform SpotX and demand-side advertising platform ZypMedia.

The case study looked at the joint strategy developed by the two companies in OTT environments.

One finding was that ads related to law, government and politics are set to drive local OTT ad growth in 2018, mirroring local ad growth on traditional linear television. That category accounted for 10% of ad spend during the case study period.

OTT environments also allow for more targeted campaigns than linear TV, allowing for political advertisers to target consumers based on their political affiliation, income or educational level. That level of granular targeting is likely to be appealing to political candidates and other public interest groups.

"We’re forecasting an increase in OTT ad spend by local broadcasters who are looking to move the needle with political ads around this year's midterm elections. This vertical alone could have a significant impact on OTT growth overall, as buyers try to influence Americans and win votes about a variety of different issues," Kelly McMahon, senior vice president of global demand operations at SpotX, told Digital News Daily.

“Politics typically eats up a huge chunk of local broadcast inventory, but the tide is turning as viewership increases on OTT,” McMahon added. “With the 2018 midterm elections approaching, we expect political spend to increase considerably across OTT.”

The study also found that between December 2017-January 2018, revenue growth was up 54%, despite video advertising overall facing headwinds in the first quarter. The companies suggest that the growth was due in large part to the joint OTT strategy.

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