Feature: Green Shoots Of Recovery For TV Advertising
TV has had it tough recently, with the sharp downturn in the TV ad market causing untold hardship for almost all of the UK’s major commercial broadcasters. Last year saw ITV suffer following the collapse of ITV Digital; Channel 4 was forced to make a raft of job cuts and strategic belt tightening was adopted across the board. Only Channel 5 and a handful of multichannel broadcasters appeared to be taking any significant steps forward.
However, there could be light at the end of the tunnel, with the latest forecast from Billetts predicting that UK television advertising revenue will grow by 4% this year, in a total market up by between 4% and 5%. The increase in spend that began in the last quarter of 2002 is expected to continue into this year and overall growth is forecast to be the same as last year.
The good news is that most advertisers are expected to increase their television expenditure this year, quietening fears that brands are turning away from TV towards cheaper, more accountable media.
Billetts also predicts that commercial audiences will grow, led by increasing multichannel penetration, which currently stands at around 11 million UK households (ITC Cable Statistics Report, Q3 2002). This is good news for the likes of BSkyB – believed to be planning to launch a range of new channels over the course of the year – but not so good for ITV1, which is expected to see revenue fall by 1%, against a 21% increase for all multi-channel TV.
The growing prominence of multichannel services was highlighted recently with figures from BARB showing that for the first time the number of people watching cable, satellite and digital terrestrial TV channels outnumbered those watching ITV1 during the Christmas week (see Multichannel Broadcasters Overtake ITV1 At Christmas). The long term effects of this on ITV are clear and a recent report from media buying agency, Zenith Optimedia, claims that ITV’s audiences could continue to decline during 2003, as the new free-to-air digital service, Freeview, becomes more popular (see ITV Could Lose Audiences To Freeview In 2003).
According to Billetts, adult commercial impacts, which are used to quantify the impact of TV ad campaigns, will grow by 2% this year, following a 2% rise in 2002 and no growth in 2001. This growth is again expected to come from the multichannel sector at the expense of ITV1 and to a lesser extent, Channel 4.
ITV recently pledged to counteract this by investing £825 million in new programming during 2003 in a bid to increase its audience share and secure lucrative advertising deals (see ITV To Put £825 Million Into New Shows Next Year). Channel 4 also announced a radical cost-cutting regime designed to deliver major savings that can be poured back into the channel’s programming budget (see Channel 4 Announces Most Radical Restructure In 20 Years).
It seems then, that while the TV industry is not yet out of the woods, the green shoots of recovery are becoming visible, as the sector begins what could be a recovery. This notion is supported by figures from the Advertising Association’s Quarterly Survey Of Advertising Expenditure, which show that television overtook direct mail during the third quarter of this year to become the fastest growing advertising sector (see AA Figures Show TV Is The Fastest Growing Ad Sector).
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