VOD having growing impact on advertising industry

Advertising expenditure in the UK reached £17,172 billion in 2012, up 2.3% on 2011 according to figures released yesterday in the Advertising Association and Warc Expenditure Report. The last time advertising spend exceeded £17 billion was prior to the recession in 2007 (£17,364 billion).

The study revealed the growing influence of video-on-demand (VOD) on the advertising industry, with VOD revenues totalling £104 million 2012, up 73% year on year.

The report predicts that VOD revenue will see a 44.2% increase in 2013, and a further 33.3% rise by the end of 2014.

New to the latest release is what the authors describe as a “major change in methodology” that allows subscribers to view the impact of online adspend for newsbrands, magazine brands and TV (see table).

Neil Mortensen, Research and Planning Director at Thinkbox says that the new methodology brings ‘greater clarity’ to how advertising budgets are being invested, which he says can only be a good thing.

“Now that it credits online revenues to the correct media, it is a more accurate reflection of the landscape and shows how established media are expanding through digital technologies. We welcome the greater clarity and this new approach should provide even more confidence that TV is an expanding medium.”

Suzy Young, Warc’s Data and Journals Director, explains how Britain’s changing media consumption patterns have led to this important adjustment in the way the data is now reported: “Over the past few years we’ve seen dramatic changes in the way people watch TV and films, read newspapers and enjoy magazine content,” she says.

“To reflect this shift driven by the rapid increase in media consumption over the internet, we now allow subscribers to view and analyse the data and forecasts in new ways. We believe this unique approach is a truer representation of today’s changing media landscape and provides a view of adspend that is relevant to agencies, advertisers and media owners.”