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One of the fastest growing advertising-supported media channels is local CTV. Local CTV offers smaller advertisers with smaller budgets and geographic needs the same benefits that larger advertisers get from CTV, including precise targeting, tailored and personalized messaging, interactive features, measurable advertiser return on investment, calculation of ad performance, and, as viewers continue to move to streaming, a growing audience.

There are a number of factors contributing to the development of CTV as an advertising platform. In recent years, ad-supported plans have been introduced by such well-known SVOD providers as Netflix, Disney+ and more recently Amazon Prime Video. The introduction of an ad-supported plan has helped SVOD providers offset the continuous increases in monthly subscription fees. Another growing ad-supported opportunity for local advertisers is free ad-supported streaming TV channels (FAST).

A report from LG Ad Solutions found that 80% of viewers watch FAST channels and 63% prefer this model. There are currently about 2,000 FAST channels nationwide and the number is growing, including CBS-owned Pluto TV, Fox-owned Tubi and Amazon’s FreeVee.

Another factor is the decline in linear TV usage. A popular advertising medium for local TV advertisers has been cable TV. Every hour, local cable operators can sell two minutes of advertising time, allowing smaller businesses (e.g., car dealerships, local retailers, etc.) to advertise on cable TV more cost-effectively than local TV stations and with a more targeted geographic reach. As cable TV cancellations continue unabated, local cable TV reach has declined sharply. As a result, local advertisers are following viewers’ shift from cable to streaming.

Programmatic ad buying plays a major role in the CTV ad buying ecosystem. Rick Ducey, managing director of BIA, says local premium CTV publishers are selling more ad inventory through programmatic channels to better target audiences with better data, optimize campaign spend and run different ad versions to see which creative solution works best. NBCU says over 60% of its streaming ad deals are now programmatic, and Disney has announced a goal of having half of its ad sales automated in the coming years.

The rise of local CTV advertising follows Facebook in attracting advertisers with lower budgets. BIA’s Rick Ducey points out that local CTV offers publishers the ability to buy ads themselves. This can be attractive to millions of long-tail SMBs (small and medium-sized businesses) who can buy ads cost-effectively by targeting only the areas where their customers are located, rather than the entire market. And without having to commit to the same minimum ad spend that some agencies and CTV platforms require.

Another result of cable television is the financial struggles and even closure of the once-lucrative regional sports networks (RSNs), which bundle sports programming for cable subscribers in a local market or geographic area. In local markets, more and more live games are becoming available through streaming and broadcast networks. Historically, RSNs have been a popular medium for local advertisers with high ratings for live games, a dedicated fan base and sponsorship opportunities. These qualities are readily available on local streaming platforms.

News channels are another example of local CTV becoming increasingly popular with advertisers, especially during election years. Local newscasts are personality-driven and have loyal audiences that are more likely to vote, making them a popular medium for political advertising messages. CTV’s advanced data capabilities allow for better geo- and hyper-targeting to reach impressionable voters on any specific campaign issue. Additionally, ads can be geo-targeted to reach voters in specific precincts by income, party affiliation and other data points.

Similar to local broadcasting, CTV can expect to see an increase in ad spend in a political year. BIA estimates that localized political advertising on CTV will reach $1 billion this year for the general election. Overall, BIA forecasts ad spend for local CTV categories to be $3.6 billion. In 2025, a politically weak year, BIA estimates that local CTV ad spend will be $2.8 billion. BIA forecasts that local CTV ad spend (excluding politics) will increase 11.8% from 2023 to 2024. Overall, eMarketer forecasts that U.S. CTV advertising will reach nearly $30 billion this year and over $40 billion in 2027.

“With the 2024 election looming, with a staggering $12.32 billion expected to be spent in ad spend, nearly triple the 2016 spend, there is a significant opportunity for CTV publishers and programmers to capitalize on this surge,” notes Greg Joseph, VP of Inventory at StackAdapt. “Connected TV remains a central platform for political news and coverage, coupled with a loyal local CTV viewer base, making it an ideal arena for political advertising investment.”

The continued growth and adoption of local CTV in the advertising industry has resulted in two mergers. This week, Madhive, a leading technology company in local CTV, announced the acquisition of Frequence, a leading omnichannel local media ad sales and workflow software for businesses and ad buyers. The acquisition will enable national, regional and CTV advertisers to deliver more precise, geo-targeted messaging across a range of media channels, including television and online video.

Earlier this month, Seedtag launched its Contextual TV offering for connected TV advertising and acquired Beachfront Media, a sell-side platform with direct access to CTV inventory. The combined companies are expected to be able to offer advertisers a more effective and privacy-compliant CTV advertising campaign to target viewers. In addition, better performing campaigns will be possible as marketers allocate a larger portion of their advertising budget to CTV.

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