55 Billion Reasons Local
Video Advertising Matters
When it comes to local video advertising, the goals are pretty simple. Ad agencies want to reach as much of their target market as possible in the most cost-efficient way.
October 5, 2022
But as consumer behavior fragments and shifts away from traditional linear and cable, and towards digital and Connected TV, achieving these simple goals has become a lot less simple.
The fact is that many agencies aren’t comfortable or properly equipped to handle today’s cross-screen challenges and optimize their spend to deliver optimal results.
Fortunately, this doesn’t have to be the case. By using a combination of data and new local planning and measurement tools, agencies can successfully navigate the $55 billion local TV and video ad market. Now it’s possible to achieve all of our goals using methods that weren’t even possible just a few years ago.
Everyone’s got the same local challenges
At Cross Screen Media, we talk to a lot of local advertisers and agencies, and they are all experiencing the same challenges. They ask essentially the same questions:
How much of my target market am I able to reach through broadcast, cable, streaming and digital channels?
Which networks and channels are the most cost effective?
What, if anything, can be done to reach those audiences that can’t be reached through traditional planning tools?
The local ad market is huge
The first thing to note is the local video market is huge… and growing. Video, overall, currently accounts for 41% of the total U.S. ad market and local video represents 17% of the entire US ad market. Not only that, the U.S. video ad market is growing at 7% CAGR. This means there’s a dynamic market with lots of new buyers, new sellers, and most importantly, new opportunities, but it will take some new tools and methodologies to realize them.
Only a few advertisers are capitalizing on cross-screen ads
With all of these challenges, it should come as no surprise that local cross-screen buyers account for just 13% of the total local market, but they account for 41% of the total local spend. Those that have cracked the code are spending more and reaping the rewards.
The local video ad market will be the next battleground for convergent TV, however, and winning this space will require an offering built specifically for local advertisers. The same ad stack built for national advertisers with an annual video ad spend of $50M+ will not work for local advertisers spending an average of $43K.
Consumer attention continues to shift and fragment
Consumer’s attention continues to quickly shift away from traditional broadcast and cable and into streaming. According to Nielsen, streaming surpassed cable for the first time in 2022.
The streaming market poses huge challenges for agencies however, as there are hundreds of channels, platforms and devices to target. At Cross Screen Media, we work with advertisers across the video ad ecosystem, a subset of which are represented in the logos below:
The local ad market is competitive
Adding to the complexity of local video is the ad buying market itself. Unlike national advertising, where just 250 advertisers buy 90% of national broadcast TV, in the local market, there are over 214,000 advertisers for linear TV alone, with almost one million more advertising on Connected TV and digital platforms. This increased competition has driven up CPMs overall.
Did You Know? The local video ad market is larger ($55B) than most people understand. It is also much more fragmented than the national ad market, with 210 individual markets and 800 times the number of advertisers.
The First Key to Success… Better Planning.
The first key to better local video campaigns is better planning. Agencies can no longer afford to simply allot a percentage of their spend to “streaming” and call it a day. Using new planning tools, it’s possible to aggregate data about your target audience and finally answer those important questions of “How much of my target market am I able to reach?” and “Which networks and channels are the most cost effective?” Just because planning has gotten more complex, that doesn’t mean it has to be hard or time consuming.
Learn more about what’s possible with local planning tools here.
The Second Key to Success… Measurement.
The second key to local video success is measurement and optimization. Digital video has long offered tools for campaign measurement, but those tools are now available for linear TV sources as well, allowing agencies to see, for the first time, a complete picture of how their campaigns are performing.
With so many inventory options, many local advertisers will benefit from starting with a clear view into reach and frequency across all of their channels for their precise audience. You may read plenty of headlines touting direct attribution as the next big thing, but for most agencies, this is like trying to fly before they can walk. The first step towards direct attribution, and one you can easily take today, is building a comprehensive cross-screen view measuring campaign performance of every impression.
Learn even more by watching our webinar, 55 Billion Reasons to Care About Local Video Ads.
About Cross Screen Media
Cross Screen Media is a marketing analytics and software company empowering marketers to plan, activate, and measure Connected TV and audience-driven Linear TV advertising at the local level. Our closed-loop solutions help brands, agencies, and networks succeed in the Convergent TV space.