Revenue from OTT TV advertising – that is, commercial advertising placed in full-length TV-quality programming delivered via broadband – is expected to grow nearly four-fold between 2015 and 2020.
According to analysis from research firm TDG, the average ad load for a 30-minute legacy linear programme will decline by 38% between 2014 and 2020, from approximately eight minutes to around five minutes. During the same period, average OTT TV ad loads will increase 63%, from 3.2 minutes to 5.1 minutes, bringing OTT TV ad loads in line with that of legacy linear TV.
This shift in ad load is not all bad for content networks. According to Alan Wolk, TDG senior analyst and author of the report, the value of legacy linear TV advertising in 2020 will be worth considerably more than today.
Wolk adds that new forms of advertising such as native and sponsored promotions will generate additional revenue and keep total TV ad revenue stable through 2020 with no growth in total revenue, but no decline, even as dollars are shifted to OTT TV.
By 2020, OTT TV ad revenue will be approximately $40 billion, just under half of 2020's projected $85 billion in total TV ad revenue.