OTT Ad Revenue Growth Slows to 20% in U.S. on Measurement Challenges

Research group says sector will reach $2.6 billion in 2019 after spiking by more than 42% last year
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U.S. advertising revenue generated by over-the-top video streaming will grow by around 20% to $2.6 billion, according to an estimate released by the Winterberry Group.

The increase will mark a significant deceleration for OTT advertising, which grew by 42.2% in 2018.

Meanwhile, the decline of linear TV is accelerating, but not that quickly. The sector will recede by 1% in 2019, according to Winterberry, to about $69.2 billion.

Putting the research into context with its own data, eMarketer suggests that measurement is all that stands in the way of OTT claiming a significantly greater share of ad dollars from linear.

Culling survey data from Kagan, eMarketer noted that among pay TV providers, media owners and advertisers, over-the-top delivery is more “valued” over linear in almost every context—from quality of data to demographics to reach to overall quality of experience.

One of the few remaining areas in which linear has the edge is measurement.

“Traditional TV measurement gives advertisers and their agencies a comprehensive view of households and audience composition across hundreds of linear TV channels,” said Randy Cooke, VP of enterprise solutions at SpotX, to eMarketer. “But OTT content is vastly more diverse than linear TV, and ad opportunities only exist where consumers stream content.”

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