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Future of TV Media Planning and Buying Data & Privacy

Looming recession means TV will be cheaper and more effective for advertisers


By Hannah Bowler, Senior Reporter

July 1, 2022 | 5 min read

The average price of a TV ad slot is set to get cheaper this year as recession looms and brands hold off spending.


TV inflation set to cool

It’s highly likely the global economy will head into recession, with World Bank chief economist Carmen Reinhart this week saying she is skeptical it can avoid one. Despite industry calls to spend through the economic crisis, advertiser budgets and consumer behavior will change accordingly – both of which will add to TV buying volatility.

The pandemic had some net benefits for TV consumption (if not production). It was a “phenomenal year” for TV ad revenue, which surged by 24% year-on-year to hit £5.46bn, says Brian Weiser, global president of business intelligence at GroupM. This was largely down to new cash-rich D2C brands entering the TV ecosystem for the first time.

“Companies that raised a ton of capital primarily through venture funds spent substantial sums on advertising,“ Weiser tells us. “However, there is no question that they are now cutting back on all sorts of expenses.”

This, he says, is “part of the reason growth won’t be as strong thing year as it was last year” – although, he claims, the “de-acceleration” has already been accounted for and the industry has “already assumed that some of the success of last year won’t be repeated this year”.

Another top buyer, Havas Media Group’s chief investment officer Simon Bevan, believes overall TV spend will be down a few percent in the second half of the year compared with the second half of 2021, after being up 7% year-on-year in the first half. The “sting and demand” for TV slots is starting to change, he says. With that, TV inflation will “cool down” and TV will become better value.

The cost of TV skyrocketed in the first quarter of 2022, with prices for the adult demographic inflated by 40% year-on-year and an eye-watering 90% for the 16-to-34-year-old audience. Volatility in the market was due to the shortening of advance booking times and the arrival of pandemic boom industries like grocery delivery and second-hand cars, which are credited for high levels of inflation.

According to Bevan, year-on-year inflation for the second half of 2022 for the 16-to-34-year-old demographic will level out to between 17% and 20%, while the total for the year will be around 40%.

Total Media’s head of commercial operations, Liz Duff, is in agreement, saying “we are nowhere like the figures we saw in Q1 of this year”. April and May have still been inflationary, Duff says, but by Q4 it will ”flatten out”. This cool down will bring brands that have been priced out of TV back into the fold.

“In a bizarre way, it takes a lot of heat out of TV,“ says Bevan. “A lot of clients think it is too expensive and we are not seeing the same ROI, but this will take that heat off and TV will become a lot better value again.”

The buyers say clients didn’t pull spend during the inflationary period, but did consider it. “In the next couple of months we will get a much clearer view of it, but at the moment brands are still trying to hold their nerves,” says Duff.

Duff, whose agency counts vegetable delivery service Abel and Cole, TikTok and Youngs Seafood as clients, says she is “starting to see advertisers that have got TV spend planned for later in the year pushing it further back”.

Bevan says that while he isn’t seeing an “exodus” across Havas Media Group’s clients, “there will be more questioning over the effectiveness of TV”.

There is an upshot. A tightening of linear budgets would lead to an “acceleration” of connected TV (CTV) buying, Duff argues. CTV is cheaper than linear and its data-rich offering can be more accountable to C-suite.

“If we do get really recessionary and brands are looking to save budget, they will probably be looking at other ways to still act in that TV space but spend less but take advantage of all the data opportunities and use the TV environment in the more targeted performance way,” she says, adding that CTV can fill that brief. She postulates there might be fewer big brand campaigns but more targeted data-led ads.

Read more on the Future of TV here.

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