Consultants are pointing to new data about digital spending as a sign that some channels are maturing in time for 2020.
Ad-insertable OTT (over-the-top), which covers smart TVs, on-demand internet services and virtual service providers like Sling TV or PlayStation Vue, is one option that practitioners believe could be more attractive to political advertisers in 2020.
“OTT consumption and inventory are only now reaching a point where there’s meat behind the sizzle,” said Jordan Lieberman, who manages campaigns for a4 Media, which sells addressable advertising across screens.
New data released Feb. 14 shows digital ad spending by brands grew by more than 20 percent over the previous year in the third quarter of 2018 cementing last year’s status as a banner year for online marketing.
The Interactive Advertising Bureau (IAB) estimated, based on a survey of large companies, that $26.2 billion in total was spent on digital in the third quarter of 2018. Much of this growth in spending has gone to channels like OTT and has come from “direct-to-consumer” brands without a bricks-and-mortar presence that sell everything from mattresses to makeup.
“2018 was a landmark year for U.S. digital advertising. Brands continued their record-breaking investment in the marketplace in the third quarter,” stated Sue Hogan, SVP of Research and Measurement at IAB. “Last year saw significant growth in the OTT marketplace and in the direct-to-consumer brand ecosystem—contributing factors in digital’s successful Q3.”
Lieberman added: “Earlier, while the technology existed, the audience and consumption patterns weren’t large enough to make OTT worthwhile to many advertisers. The next two hurdles for OTT are household addressability and frequency control, both of which have been elusive.”
If money continues to flow into digital the way it has, those hurdles may not exist for long. In fact, digital ad growth overall between 2017 and 2018 was 23 percent, according to IAB’s most recent full study, which saw spending go from $40.3 billion to $49.5 billion over 12 months.
Meanwhile, the report notes, the Nielsen Company estimates traditional media revenues for 2018 increased 3 percent from 2017. The IAB issues two full reports on digital spending throughout the year and does top-line quarterly estimates in the first and third quarters.
Some researchers are still tabulating the digital spending for last cycle, but recent estimates for 2018 pegged it around $950 million — a $300 million increase over 2016.