Facebook and Netflix push UK TV ad spend past £5bn
James R | On 24, Feb 2016
TV advertising spend in the UK topped £5 billion last year for the first time.
Advertising revenue totalled £5.27 billion in 2015, up 7.4 per cent on 2014 – the sixth consecutive year that revenue has grown.
The figure represents all the money invested by advertisers in commercial TV, from linear spot and sponsorship to product placement.
It highlights the continuing hold that the goggle box in our living rooms has over consumers.
Indeed, BARB figures suggest commercial TV reaches 92.5 per cent of the UK every week, with an average broadcast TV campaign in the UK gets 234 million views. As a result, there are 17 million conversations about TV advertising every evening in the UK.
Advertising Association estimates indicate that the total UK advertising market grew to £19.7 billion in 2015, up 6.1 per cent year on year, but that TV advertising’s 7.4 per cent growth outpaced the market. Based on the AA estimate, TV accounted for 26.9 per cent of the total UK ad market in 2015.
“TV advertising works, it works better than anything else, and it works for all budgets,” argues Lindsey Clay, Chief Executive of Thinkbox, which compiled the figures. “Nothing else has TV’s reach, scale and connection with audiences; no other form of advertising is as trusted.”
It is also increasingly affordable in a world of digital media: 2015 TV advertising was 30 per cent cheaper in real terms than 10 years ago.
Ironically, though, online businesses are becoming increasingly bigger spenders on TV advertising – a trend that Thinkbox expects to continue in 2016.
Online businesses are now the second biggest category of advertisers on TV, investing over £500 million in TV in 2015, an increase of 14 per cent on 2014. Google, Facebook and Netflix spent over 60 per cent of their marketing budgets on TV adverts.
Facebook, in particular, was the year’s biggest new TV advertiser, investing £10.8 million. Gaming company Machine Zone spent £6.6 million and online estate agent network Agents Mutual Ltd invested £5.9 million. Together, these new or returning advertisers accounted for 2.3 per cent of total TV ad revenue in 2015, according to Nielsen.
It is worth noting, though, that the figures also include broadcaster VOD adverts – how much of advertising revenue will they compromise in the coming years, as time-shifted viewing increases?