Unless significant changes are introduced to the linear TV advertising model, Enders predicts that television ad revenues could be £364 million lower in 2027 compared with 2019.
This is the key finding from its TV advertising: Evolving the model report, published yesterday.
If Share of Budget (SOB) were to include YouTube, and without any progress in effective cross-media measurement, Enders believes that TV revenues may fall by a further £461 million, so potentially £825 million lower in 2027 than 2019.
By 2027, Enders forecasts that broadcasters will only account for 61% of total video viewing across all platforms and just two-thirds of all commercial video. That’s down from 72% and 74% respectively today.
Following interviews with senior industry experts, representing broadcasters and sales houses, advertising agencies, advertisers and advertising experts, Enders found that advertisers want a vibrant TV ecosystem that offers high-quality programming available on any device at any time; innovative advertising products covering linear and Broadcaster Video-On-Demand (BVOD) with greater targeting opportunities, plus greater flexibility than at present.
As part of its report recommendations, Enders has called for more transparent contractual terms between the agency and advertiser, featuring impartial media recommendations; the role of media auditors to evolve so that advertisers can better understand the overall effectiveness of constituent parts of audio-visual campaigns in driving value for the longer term; and for unified measurement across linear and BVOD, followed by an industry-standard system measuring reach and frequency across all media.
The report stated: “The lack of an effective measurement system across linear and BVOD was of great concern to all advertisers and some agencies, with a common view that BVOD’s value remains unproven.
“The introduction of a unified measurement system must go beyond TV/BVOD and include all audio-visual advertising at a minimum and ideally all display. It must accurately measure what consumers are doing, taking into account the impact of viewability, sound, screen, attention and context.”
The report concluded: “If evolving the TV advertising model even marginally can result in a better advertising product and rebalance expenditure biases, it will help not just advertisers but will optimise an ecosystem for more sustainable and profitable product supply.”
