TV advertising reach and market share are both holding firm in UK

The reach of television advertising is still holding firm in the UK, despite the attractions of new ad-free services like Netflix, and television still has the same (monetary) share of the advertising market that it had 20 years ago. These are two of the encouraging facts highlighted this week by Thinkbox, the marketing body for commercial TV in the UK, as it revealed that TV spend is back to pre-recession levels in real terms (i.e. with adjustments for inflation) and, after six years of consecutive growth, is currently growing faster than the advertising market as a whole.

So the death of commercial television has been delayed – again! Using the latest (2015) BARB figures, Thinkbox points out that commercial TV reaches 92.5% of the UK population every week. When you compare reach into specific demographic groups in 2011 and 2015, the results are: Adults 94% down to 92.9%; ABC 1 adults down from 93.2% to 91.8%; 16-34 down from 90.1% to 87.7%; kids down from 91.6% to 90.1%; men down from 93% to 91.9% and women down from 95% to 93.9%. Though there are drops, they are not nearly as bad as you would expect given some of the doom-laden prophesies about TV advertising.

From the 2010 figure of four hours average per day, viewing is down to 3 hours 45 minutes in the UK but Matt Hill, Research and Planning Director at Thinkbox, says most of this fall is due to heavy TV viewers (people watching over 20 hours per week) watching less. Reduced unemployment partly explains this, he reckons. Overall, people in the UK are slightly lighter TV viewers today but this has not had a serious effect on reach, which remains one of the great strengths of TV as an advertising medium. Hill characterizes reach as being “very stable”.

He believes television has stood firm in the face of the digital challenge because it does a different job, especially to search. “Search is not a demand generating media, it is a demand harvester,” he explains. “If you want to create demand you cannot rely on that.” Thinkbox has flagged BARB figures (from 2015) showing that an average broadcast TV advertising campaign in the UK gets 234 million views, while BARB/Thinkbox research shows that there are 17 million conversations about TV advertising every evening.

When it comes to overall share of the advertising market in the UK, the 1995 figure for TV was 26.7%, whereas in 2014 it was 26.5%. In the same period, press, the biggest loser from the digital revolution, saw its market share crumble from 58.5% to 19.5%. TV remains the best profit generator, Thinkbox notes. Figures from Ebiquity (Payback 4 study) covering 2008 to 2014 show that for every £1 invested in TV advertising, brands achieved a return of £1.79. That compares to ROI figures for radio of £1.52, press at £1.48, online display at £0.91 and out of home at £0.37.

Lindsey Clay, Chief Executive of Thinkbox, declares: “TV advertising works, it works better than anything else, and it works for all budgets. Nothing else has TV’s reach, scale and connection with audiences; no other form of advertising is as trusted. Advertisers of all sizes, from global technology companies to local businesses, know this and have voted with their investment. 

“Online businesses in particular recognise the impact TV advertising has and have significantly increased their investment recently. This is something we expect to continue in 2016.”

She is referring to the fact that online businesses are now the second biggest TV advertising category in the UK, investing over £500 million in television during 2015, an increase of 14% on 2014. Google, Facebook and Netflix spend over 60% of their marketing budgets on TV advertising, Thinkbox says, using data from Nielsen. 

Facebook was the biggest-spending new TV advertiser in the UK last year, investing £10.8 million. In total there were 877 new and returning (after five years or more) advertisers on TV. These new or returning advertisers accounted for 2.3% of total TV ad revenue in 2015, according to Nielsen. Sky AdSmart, with its household-level addressable TV advertising, is one of the things helping to attract new customers to television, including more local brand advertisers.

This all helped to drive TV revenue up by 7.4% last year compared to 2014, the largest increase since the recession ended. The overall advertising market is growing at 6.1% year-on-year (using the estimated figures of the Advertising Association for the whole market). The total spend hit £5.27 billion – a record. This figure represents all the money invested by advertisers in commercial TV: linear spot and sponsorship, broadcaster VOD and product placement.

The revenue rise was also driven by established TV categories increasing their investment. Motors increased TV spend by 18% to £318 million, finance increased by 17% to £428 million and household FMCG increased by 14% to £199 million, according to Nielsen.

Thinkbox also points out that TV advertising is 30% cheaper than ten years ago. The rise of multichannel TV in the free-to-air market is the main cause, as more commercial channels have gained prominence and advertising inventory has increased against a backdrop of stable demand. More recently there has been increased advertiser demand and some decline in TV set viewing, causing some inflation in TV advertising prices, but this is included in the 30% figure.

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