Home / Ad Tech / UK TV market is hanging in there but it’s really worth £3bn – not the advertised £5.28bn

UK TV market is hanging in there but it’s really worth £3bn – not the advertised £5.28bn

TV marketing body Thinkbox has been bigging up 2016 TV revenue figures – £5.28bn, a narrow 0.2 per cent increase over 2016 albeit only just. TV advertising slowed down in the wake of Brexit vote so it’s a pretty creditable performance.

TV advertising in the UK has grown every year since 2000 with the exception of post-financial crisis 2009 – but only at current prices.

If you factor in inflation then today’s £5.28bn is worth just over £3bn at 2000 prices, when revenue was £4bn, its peak year at adjusted prices. No wonder the late Lord Thomson (who owned Scottish TV as well as the Times and Sunday Times) described it as a “licence to print money.” The Times titles were not, of course. Anyway, the point is that, in real terms, the UK TV market is worth about 56 per cent of its value in 2000 despite there being many more digital channels, although far fewer regional contractors.

The overall ad market is up, of course, chiefly thanks to digital although much of this is search on Google which isn’t really advertising at all, it’s direct marketing. Digital has, mostly, taken share from print although many print owners now have substantial digital businesses – the trouble is they’re far less profitable. But TV has clearly lost out too and is in the process of being overtaken by digital in the UK as in other markets.

Read Also:   CHI gets back on the road with Lexus RC launch

So the picture for TV spend and, by extension creative advertising which still largely depends on TV as its prime outlet, is not as rosy as its supporters claim. For now it seems to be holding its share of the market at around 40 per cent but you get the impression it’s hanging on by its fingertips.

That could change, of course. Everybody knows, or thinks they know, that much online advertising is wasted because about half the audience doesn’t look at or even notice the ads (or look at them for more than a nanosecond) and lots of “impressions” are fraudulent. Advertisers seem to be waking up to the fact that about half what they pay for what they fondly believe is hyper-targeted programmatic advertising actually ends up in the pockets of “middlemen,” media agencies and the like. Which means that it isn’t actually cheaper at all.

A new Nielsen measurement system in the US that claims to measure all media is likely to support the case for advertising on TV as opposed to online, or so US broadcasters would have us believe. Even Google and Facebook are on the back foot as more evidence emerges about the faulty findings from their precious data-stuffed “walled gardens.”

Nonetheless they remain potent competitors to TV, as is Snapchat (a ten second medium for goodness’ sake) and Amazon, which WPP’s Sir Martin Sorrell recently said was keeping him awake at nights. Amazon has about $1bn of ad revenue (it isn’t really trying yet) and, probably, more useful data than anyone. Such online companies are now the biggest advertisers on TV in the UK, with Amazon in the lead. Which may tell us something too.

Read Also:   W+K's Neil Christie: my top tips for Cannes

That’s in the future though. for now we can see that TV is, in real terms in the UK, a markedly smaller medium than it used to be. Which explains a lot about the current state of creative advertising as well as media sales.

You May Also Like

About Stephen Foster

Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.

Leave a Reply

Your email address will not be published. Required fields are marked *

*

© Copyright 2013 More About Advertising, All Rights Reserved. With help of WPWarfare.com. | Cookies explained.