At ‘TV in Focus: 2022’ in London this year, Matt Hill, Research and Planning Director of Thinkbox (the marketing body for commercial TV in the UK), argued that media planners should weight their budgets toward BVOD over linear when targeting younger audiences (16-34s). Using BARB data and estimating average CPTs for the period observed, he showed that 2021 UK campaigns (with a £1m budget) which were purely linear achieved a reach of 30% for this age group, while campaigns which were split equally between BVOD and linear saw a reach of 45%.
Importantly he notes that, when viewed from an ‘all-adults’ point of view (rather than just 16-34s), dedicating 10% of campaign budgets to BVOD “doesn’t drive a cost-effective response”. Although in this instance, while the effective reach looks similar to a 100% linear campaign, the profile of this type of reach is comprised of a much younger audience.
Hill also reviewed the inflation TV pricing underwent last year and across different age groups, remarking that the rise in average CPT for adults had been “reasonable” – from just over £4 to almost £6 between 2020 and 2021, according to BARB and AA/WARC data. In contrast, for 16-34s, CPT had risen from £35 to around £52. Hill believes the upshot of this dramatic rise in CPT for 16-34 audiences is that BVOD may become a “starting point” for advertisers’ media plans, since BVOD pricing has been “pretty static” (hovering around £25-35).
Hill emphasised that, while TV is getting more expensive, inflation is not a challenge for TV alone. Using AA/WARC, BARB and Comscore data, Thinkbox estimates that the average cost per thousand for a 30-second TV ad was £7 in 2021, while the cost for a YouTube ad was approximately £10. Other online video ads cost almost £90 last year according to Thinkbox, due to the fact that ads on these platforms are “very easily skipped”.
Hill said: “We need to think about the value of TV rather than just the fact that its price is changing because of a supply-demand dynamic. Cost-effective reach remains a priority for media planners.”
Reviewing BARB data, Hill also showed that 65% of UK adults can “easily be reached through linear TV”, with this proportion of the population consuming somewhere between 50-501+ TV ads a week through traditional broadcasting. Beyond this 65% it becomes harder to reach audiences, Hill remarked, with 8.7 million viewers watching linear but consuming less than 50 ads per week.
Hill outlined how UK TV ad spend has seen significant increases across different sectors and particularly from online businesses. According to AA/WARC estimates for 2021, TV experienced a surge in ad spend from food delivery/food subscription businesses (such as Just Eat, Uber Eats etc.) with total TV ad spend from this sector reaching £127m – a rise of 184% (£82m). Similarly, the online second-hand car sector (which includes companies such as webuyanycar.com and Cazoo) spent £74m last year on TV – an increase of 222% (£51m). Another sector which increased its TV ad spend heavily was the market for streaming services. Across 2021, streaming service providers spent £52m on TV, up from £21m in the previous year.
He said: “[During the pandemic] a whole range of micro online businesses were using TV to grow. They’re using it because it is a shop window for their brands. They might not have a physical presence and so need to be front-of-mind [among consumers]. They have a need to scale quickly and TV is good at this because you can speak to lots of people in a very short time.”
An important benefit of advertising on TV Hill highlighted is not just that it drives traffic, but also that “the people coming to your business when you’re advertising on TV are more likely to buy.”
He reviewed the econometric breakdown of a campaign from an advertiser in the furniture industry. When aggregate exposure was between 0 and 10m weekly TV impacts, the conversion rate for viewers was just over 0.8%, while when aggregate exposure was between 60 to 70m weekly TV impacts, the conversion rate rose significantly to almost 1.8%.
