How Long Before OTT Advertising Equals Traditional TV Ad Revenue? Sooner Than You Think … But Wait Till You Hear What’s Happening to the Ad Load on OTT vs. Linear
A new projection shows a surprisingly short timeline for ad revenues from over-the-top distribution to catch up to traditional TV advertising. Writing in MediaPost, Wayne Friedman reports that OTT advertising is projected to account for about half of all TV ad revenue in just five years — by 2020.
The projection comes from Texas-based Diffusion Group, which estimates that ad revenues from OTT will be about $40 billion in 2020, a little less than half of the $85 billion projected for total TV advertising revenues.
“Some of this is due to growing advertising time in a typical 30-minute OTT program — which will rise 63% to 5.1 TV commercials in five years, from 3.7 TV commercials currently,” Friedman writes.
On the other hand, the average ad load on linear TV is projected to fall. The Diffusion Group says the average load for a 30-minute program will plummet 38%, down from the current 8 minutes to about 5 minutes in 2020.