Dive Brief:

• Marketers boosted their advertising spending on local over-the-top (OTT) TV by 127% last year to reach audiences on connected TVs, according to a study of 3 billion ad impressions by ZypMedia, a programmatic ad platform for local over-the-top media outlets. The total number of local OTT campaigns jumped 58% while the number of advertisers increased 33% from a year earlier, the startup found.

• The automotive industry maintained the top spot in a ranking of local OTT advertisers, growing by more than 50% to 1,249 companies last year. That was ahead of the home and garden (855 advertisers), health and fitness (706), education (421) and arts and entertainment (347) categories. Education saw the most growth with a 250% surge last year.

• Roku was the most popular brand of streaming devices based on total ad spend, delivering 53% of available monetized OTT ad inventory last year. That was ahead of Amazon Fire TV (14%) and Google's Chromecast (8%), while the remaining 25% was split among other devices. Those streaming devices delivered 77% of OTT ads, ahead of 19% for smart TVs and 2% for gaming consoles.

Dive Insight:

Local OTT advertising is growing rapidly as the technology to insert programmatic ads into connected TV (CTV) video streams continues to evolve, ZypMedia's data suggests. As more viewers cancel pay-TV service and hook up their TVs directly to the internet, local advertisers will continue to dedicate more of the media dollars to OTT platforms that also promise more refined audience targeting than linear channels.

The 127% surge in local OTT ad spending observed by ZypMedia was about seven times as much as the 19% increase in U.S. digital ad spending measured by researcher eMarketer, which estimated that the number of non-pay TV households totaled 44.1 million by the end of last year. That figure is forecast to grow to 65.5 million by 2024, almost overtaking the number of pay-TV households, whose numbers will slide to 66.1 million that year. Those diverging trends suggest that most U.S. households will be "cord cutters" or "cord nevers" by 2025, helping to drive an ongoing shift toward OTT ad spending.

Among U.S. regions, the Midwest saw the highest growth in local OTT ad spend at 164% last year, ahead of the 139% gain for the South, 125% for the Northeast and 119% for the West, according to ZypMedia. The Midwest's share of local OTT ad spending inched upward to 21% last year from 19% in 2019, while the South's share increased to 33% from 32% for the comparable periods. The Northeast and West both lost share.

However, the Northeast had the highest proportion of ad spending (24%) in comparison with the broader U.S. population (17%), likely indicating that advertisers targeted major media markets like New York City, per ZypMedia. The company's data are based on more than 20,000 campaigns that ran on its platform among almost 6,000 advertisers.