The TV spot: a stalwart of UK ad expenditure
In the second of our exclusive articles digging deeper into the latest Advertising Association/Warc Expenditure Report, Suzy Young, Warc’s data and journals director, looks at the resilience of the traditional TV spot.
In 2013, total UK TV advertising spend rose by 3.6% to £4.64 billion, according to the latest data published in the Advertising Association/Warc Expenditure Report which we released on Monday.
Overall adspend growth is predicted to accelerate over the forecast period, increasing 5.5% in 2014 – the second quarter is expected to be particularly strong due to the relatively late Easter and the World Cup – and by 7.3% in 2015.
But what are the media stories behind these headline figures? For one, the rapid growth of the broadcaster video-on-demand (VOD) sector within TV has attracted a lot of interest in recent times and is often portrayed as the next big thing for broadcasters.
Indeed, we know that total adspend in this area increased 73% in 2012, and by a further 21% last year, an increase largely attributed to the continued popularity of catch up TV channels.
But even so, the broadcaster VOD element of TV adspend as a whole is very small – in 2013 it amounted to just £126m, or 2.7% of total TV. By the end of 2015 it is only expected to have reached a 4% share on this same measure.
As detailed in the chart above, TV sponsorship has maintained a steady 5% of share of total TV spend since 2011, and is expected to continue to do so through to 2015, while ‘other TV’ – including product placement and advertiser funded programming – accounts for just 1-2% of revenues throughout. The real story here is the resilience of traditional spot advertising, which still accounts for the vast majority of spend.
Advertisers continue to choose the tried and tested traditional route for their TV budgets. And why change? Most TV viewing still takes place on a TV set (some 98.5% in 2013 according to Thinkbox, a marketing body for the TV industry) and while catch-up TV plays its part, 89% of TV watched on a set last year was watched live.
Over the course of the last 30 years, the traditional TV spot has underpinned total UK advertising spend, consistently maintaining its share of the market. While broadcaster VOD makes the headlines, the TV spot is the real stalwart for the UK ad industry.
Commenting on the findings, Thinkbox’s research and planning director, Neil Mortensen said: “This is a story about the quantity of money invested in advertising, but the most important aspect is the quality of the results from that investment.
“Business leaders know that TV advertising works and spot advertising is the cornerstone of the most successful advertising campaigns.
“The strength of TV ad investment now and as forecast by the AA/Warc reflects commercial TV’s vibrancy and also acknowledges the huge amount of robust evidence proving its unrivalled ability to create business profit.”
To find out more about subscribing to the AA/Warc Expenditure Report please visit the website or contact Suzy Young for additional information.
MediaTel subscribers can also now gain access to adspend and revenue figures by medium and aggregated forecast trends by medium from AA/WARC, Carat, eMarketer, GroupM and ZenithOptimedia in the new Media Landscape tool.