Why the Best Local Advertising Now Includes OTT

How can local media companies succeed with OTT advertising? New data from the local media consortium reveals why the best local advertising now includes OTT, especially in the news category. Data from our most recent State of Media Sales survey confirms the growing importance of the OTT format.

What is the state of the local media industry?

Around 170 local media companies participated in the most recent industry survey done by the local media consortium (LMC). The companies in the survey represented a mix of formats including newspaper and broadcast. In addition, 16% were online-​only organizations.

The survey revealed opportunities and challenges for these companies.

Where are local media companies’ new revenue streams?

The top sources of revenue for local media companies include the following:

• Video/​OTT/​CTV 18%
• Email newsletters 15%
• Ad revenue 13%
• Website/​app redesign 13%

What are the challenges of local media companies?

When it comes to challenges, around 31% pointed to advertising declines. In addition, 18% noted traffic declines.

These trends were echoed in our State of Media Sales survey, conducted jointly with BIA Advisory Services.  55% of respondents reported reduced advertising spend as a challenge. They also noted that many advertiser accounts were moving their spending to other marketing channels.  For many businesses, the best local advertising is OTT.

How does OTT deliver for local media?

Venturing into OTT/​CTV advertising is a good way for local media companies to recover and generate revenue.

In our State of Media Sales survey, around 52% of media sellers reported that selling OTT TV generated the most commission and bonuses for them. That’s twice as high as the 26% who said the same about broadcast TV media selling. In addition, around 31% of media sales managers indicated that selling OTT TV is one of the most profitable ventures for their companies.

How does OTT make local news reporting more profitable?

The news content provided by local media companies drives 66% of traffic but only 55% of revenue. Delivering local news through OTT can be a great opportunity for media companies to improve profitability.

The Audience for News

According to AudienceSCAN, around 42% of local TV station watchers responded to a TV ad in the past 30 days. Nearly as many, 39%, responded to a streaming TV ad.

Beyond advertising response, news reports capture consumer attention. But the way consumers get their news has changed. The Medill Local News Initiative survey points to smartphones as the primary way consumers get their news (67%). Contrast that statistic with the 53% of consumers who get their news through broadcast TV – often or all the time.

Around 30% of Gen Zers and millennials only stream the local news online.

The online news audience is growing, making it a strong candidate for OTT advertisers.

Data on OTT News Consumers

Nielsen measured local OTT impressions by age group last fall. Most of the local OTT audience skewed younger. But nearly half of the local news impressions went to consumers age 65+.

In addition, local OTT sellers can pitch unique content to advertisers. Because the content is viewed on demand and not limited due to traditional time slotting, local content producers have flexibility. They can give audiences the in-​depth reporting they want and deliver OTT advertisers the attention they’re seeking. This is a clear example of how OTT is the best local advertising.

Why short-​form video matters?

AudienceSCAN data also shows that 22% of U.S. adults have used their phone or another digital device to visit the app of a local newspaper. Not surprisingly, these consumers tend to be younger, under age 45. And 48% live in an urban area.

They could be accessing the local newspaper app to learn more about what’s happening in their area. With mobile access, consumers are taking in more short-​form video. Their interest extends beyond the news category. And in this way, local advertisers can reach them through OTT on mobile. This method of consuming content is a reminder that ads must respond well in the mobile environment.

OTT is promising a form of best local advertising. Delivering new kinds of programming, especially news-​related, along with OTT ads, can be a win for both media firms and advertisers.

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