Expenditure on TV advertising in the UK will fall to £4.3 billion this year, a decrease of 2.9 percent and the first time TV spending has shrunk in five years, despite overall investment in advertising swelling by 4.8 percent to £18.9 billion. This data, from GroupM’s ‘This Year Next Year’ UK marketing forecast, predicts that TV won’t recover immediately either, with 0 percent growth forecast for 2018. Meanwhile digital continues to grow at the expense of legacy media, with digital video still performing well despite this year’s YouTube brand safety concerns; GroupM believes that three quarters of brands who paused advertising on YouTube have resumed since.
Overall, given a context of economic uncertainty in the UK, advertising’s growth has been surprisingly strong according to GroupM, but this strength has not materialised in TV. While TV has by and large avoided the drain which digital advertising has placed on legacy media, enjoying growth of 10.4 percent as recently as 2015, this year it is expected to shrink by 2.9 percent. Economic uncertainty is currently encouraging short-term thinking, according to GroupM’s futures director Adam Smith, which helps digital but hurts TV. “The focus of marketers remains relentlessly short-term and arguably underweighted relative to long-term brand building in broadcast media. This favours performance-oriented digital media which continue to be the most robust growth story despite concerns over measurement, transparency, brand safety and other issues,” he said.
GroupM’s stats show many of the largest TV advertising industries pulling away from TV: between September 2016 and August 2017, food spending decreased by 13.8 percent, cosmetics and care spending decreased by 18.8 percent, and automotive spending decreased by 11.1 percent. There are also worry trends in TV viewership, with linear TV impressions for 16-24 year olds shrinking by 12 percent this year.
It’s not all bad news for TV though. These 16-24 years olds have in many cases shifted to video-on-demand (VOD) content, and with more broadcasters investing in VOD services, as well as better measurement of VOD viewership from BARB’s 30-platform Dovetail measurement which is due to launch next year, TV will have a better chance of proving its worth to advertisers. Other new forms of TV advertising can bolster revenues too; GroupM holds high hopes for addressable TV’s ability to attract ad-spend, and also in the report outline how A/V partnerships and content are being used to mitigate the loss of 16-24 year olds.
Meanwhile, digital continues to perform strongly, with 13 percent growth predicted for 2017, and ten percent growth for 2018. Google and Facebook’s recently reported strong performances have played a big part in this, and even concerns around brand safety on YouTube haven’t had too much of a lasting impact. GroupM believes that 75% of those who paused advertising on YouTube earlier this year have now returned to normal levels, while the others have returned, but are allocating a smaller share, with some of the money now invested in addressable TV or VOD platforms instead.
In some parts of the digital market, GroupM believes prices are set to shoot up significantly in the near future due to a mixture of finer targeting, wider-spread verification, higher costs in programmatic due to tech and data costs, and more brands in the market. Certain platforms are becoming crowded, with Facebook’s newsfeed in particular given as an example. This could lead to more advertisers seeking to produce ‘fit for platform’ content in order to maximise view-through and minimise cost-per-view.
Across mediums though, the report emphasised the importance for brands to see advertising as a brand-building investment, rather than just a cost, and to iron out lingering issues. “Our forecast shows a stable market in an overall low-growth consumer spending environment,” said GroupM UK CEO Nick Theakstone. “This is encouraging, but we are concerned about pressures on marketers to overweight short-term ROI versus brand building for the long-term. It’s imperative they get the balance right”, said Nick Theakstone, CEO, GroupM UK. “It’s also crucial that the industry deliver better audience measurement to support media planning for performance and brand building alike.”