Almost half of the growth in local video ad spending during the next five years will go to digital platforms, including local mobile video, local online video and out-of-home video, according to a new study on advanced television advertising published last week by BIA/Kelsey industry analysts.

The growth in digital platform advertising approximately matches the expected growth in local cable TV advertising during the period, the report, "Advanced TV: Industry Views on Progress & New Directions," concluded.

BIA/Kelsey's local ad forecast, compiled during July research, envisions $7.1 billion growth in local cable ad spending next year compared with $5 billion for local online, mobile and out-of-home video spending. In 2021, local cable ad growth will amount to $6.9 billion, while the combined local digital platforms will tally $6.7 billion.

The report -- the fifth in the company's series analyzing local digital video advertising platforms -- predicts that by 2021, local digital "ad activation" will represent 43.6% of local ad spending versus 56.4% for "traditional" video media. That's a significant jump from today's 33.2%/66.8% split.

In dollar terms, the study predicts that all local linear TV and digital video combined platforms will grow from $31.9 billion in 2017 to $37.3 billion by 2021. The broadcast TV segment will grow $2.7 billion and the cable/MVPD segment will grow by $200 million (see chart).

"We are seeing very interesting innovation in cross-platform solutions, audience targeting, local data management platforms and a drive toward more accountability in media campaigns," according to the BIA/K analysis. "These innovations may bend current trend lines in the media mix if linear video can become competitive."

BIA/K's report focuses on the increased use of data-enhanced audience targeting via addressable, contextual audience networks, over-the-top, connected TV and programmatic TV platforms, all of which the company said "continue to innovate, and bring change in the national and local TV markets through technology, data, and new forms of automation and efficiency."

The report includes extended interviews with six media and technology executives, including Steve Silvestri, vice president of advanced advertising at Discovery Communications; he oversees the 18-month-old Discovery Engage platform that leverages custom and syndicated data segments for the company's networks.

"The [Engage] platform has consistently showcased its ability to mine high value programs across the Discovery portfolio that may have been previously unconsidered, but now afforded through selling title optimization," Silvestri explained. "Most of our advertisers are purchasing audiences deeper across our portfolio and expanding their network consideration set."

He said that while a "traditional buy" might include four to six networks, an "Engage buy can run to eight or nine networks."

"Through test and control anonymized ad exposure analysis, Engage has proven out lift metrics using transactional data, foot traffic rates and brand surveys," Silvestri added.

The other organizations cited in the BIA/K report are AudienceXpress, Discovery, FreeWheel, Sinclair Broadcast Group, TiVo and Tremor Video.

"As marketers and agencies want more cross-platform campaign planning, activation and evaluation, these tech stacks and business processes must work better together," said Rick Ducey, managing director, BIA/Kelsey and a principal author of the report. "Capital investment, innovation and change is coming to the local TV marketplace," he added citing the perceived values of data-driven audience targeting and advanced TV solutions.

Ducey also pointed out that "advanced TV" has moved beyond its earlier focus on "interactive TV applications" and "addressably-delivered" ads, in which a commercial was delivered to a pre-designated, targeted household. He characterized advanced TV as now comprising "data-enhanced audience targeting via addressable, contextual audience networks, OTT, connected TV and programmatic TV platforms."

The BIA/K report cites "new forms of automation and efficiency" as the key components of Advanced TV, including include platforms, workflow and data.

Kantar Media is projecting TV ad spending in 2016 (a presidential-election year) will hit $4.4 billion, though the report notes there are many variables yet to play out, such as how long the Republican primaries string along in contested fashion and how much financial support outside groups will pour into the Hillary Clinton campaign on the Democrat side. That figure would be about a 15% an increase from the reported $3.8 billion spent on TV ads in the 2012 campaign.

Elizabeth Wilner of Kantar said in a post for The Cook Political Report that Kantar's Campaign Media Analysis Group analysis does assume there will be a $500 million bump in presidential-campaign spending just because this is the first presidential race since the Supreme Court's Citizens United decision paved the way for more possible spending by outside groups.

"We could see less than $4.4 billion on TV if the GOP primary drags on, or more than $4.4 billion if it wraps up fast," Wilner reported. "We could see less than $4.4 billion if Democratic billionaires don’t bring their A-game for Clinton, or more than $4.4 billion if they do. We also could see more than $4.4 billion if California produces a juicy slate of ballot initiatives. Overall, we see slightly more upside than downside in this early estimate of 2016 political TV ad spend."

If a Republican candidate emerges from the primaries relatively quickly, it could lead to more spending in groups of 10 states or more at a time, rather than if several candidates are only spending in a few states at a time while the primaries are competitive, the Kantar analysis said

The Kantar estimate projects $3.3 billion of the political-ad buys to go to local broadcast TV stations and about $800 million (or 20%) going to local cable ads. Kantar said cable ad sellers are predicting they will get a 30% share but that Kantar's information from several large media shops was that cable would get 18%-24%.

National broadcast ads could pull in about $300 million, Kantar said. The Obama campaign effectively played national networks and local stations against each other, which led to more national-ad spending, and the same could be true for campaigns in 2016. 

Photo: Hillary Clinton at an April 2015 campaign visit to Jones Street Java House in Le Claire, Iowa, via Wikimedia Commons.

The rise in local cable advertising demand we identified over the past two college bowl seasons was merely a prelude to the dramatic figures that Viamedia tallied for Monday’s 2015 College Football Playoff National Championship Game between the Buckeyes of Ohio State and the Oregon Ducks.

Despite four turnovers that kept the game close for a while, the Ohio State decisively defeated Oregon 42-20 behind the monster rushing effort of Ezekiel Elliott (pictured) who gained nearly 250 yards on 36 carries. 

And from what we can tell, local cable advertisers were in a rush to appear right alongside him.

Overall, nearly 500 local cable clients across +130 cable zones in 55 Viamedia Markets aired 2,300 :30 second (equivalized) spots in the 2015 College Football Playoff National Championship Game.

But that’s only half the story.

We took a look at local cable advertising demand for this year’s Championship Game versus last year’s 2014 BCS National Championship Game between #1 Florida State and #2 Auburn. (To keep our comparison on an apples-to-apples basis, we confined our analysis to the 45 Viamedia markets that exhibited advertising in both championship games. Moreover, to account for ESPN’s 2015 “megacast” on ESPN2, ESPN U, ESPN Classic and ESPN Deportes, we also excluded 2015 local cable advertising dollars on these sister ESPN networks.)*

Even with all the exclusions, the 2015 Championship Game was one for the record books, with advertising revenues rising 74% over last year’s game! That increase is comprised of three components:

1. 36% rise in the number of 30-second (equivalized) units;
2. 28% rise in unit pricing;
3. 10% rise due to the multiplicative effect of units sold and pricing.

Automotive advertising has always been a staple of college football and the 2015 Championship Game was no exception. Indeed, if anything, the local cable automotive category (which includes both national manufacturers and local dealerships) was even more pronounced this year. Overall, 45% of total advertising in the 2015 Championship Game was automotive (versus 39% last year). After automotive, the next three highest categories were Financial Services (9.6%), Retail/Department Stores (6.6%) and Restaurants – Full & Quick Service (6.1%). In other words, nearly 7 out of every 10 dollars spent by local cable advertisers were from these four categories.

Last month we speculated that – in the hearts and minds of many college football fans – no single, national championship game would settle once and for all the perennial debate as to which college football team is truly number one. But there’s no doubt that the premiering of the 2015 College Football Playoff National Championship Game has won over local cable advertisers like never before.

*Source: Viamedia analysis of B.I.G. internal database (“Sports & High Profile Tracker”) across the 45 markets that exhibited local cable advertising on ESPN only for the 1/6/2014 BCS National Championship Game (between Florida State & Auburn) and the 1/12/2015 College Football Playoff National Championship (between Ohio State and the University of Oregon).

Mark Lieberman is president and CEO of Viamedia.