TV ad revenue in the UK grew by 0.17% in 2016 to reach £5.28bn, the seventh consecutive year of growth despite economic uncertainty caused by the vote to leave the EU, according to full year revenue figures provided to Thinkbox by UK commercial TV broadcasters.
This is thanks largely to investment from online businesses - including rival brands Amazon, Netflix, Google and Facebook - which now represent the biggest spenders on TV. Irrespective of the fact that such brands (excluding Netflix, which doesn't have an advertising offering) are trying to siphon off TV ad spend to their own properties as many of them bolster their online TV offering.
Facebook unveiling a set-top TV app last week is the latest evidence of how online channels are encroaching on TV territory.
Online businesses invested £639m in TV during 2016, an 8% increase year-on-year, based on 2016 data from Nielsen.
The biggest spending online businesses on TV included Amazon at £34.3 million, 39% up from 2015, Comparethemarket.com owner BGL Group at £38.8 million, 4% down and Moneysupermarket at £25.9 million, 6% up.
By comparison the food industry - the second largest investor - spent £70m less on TV in 2016 at £627m, while cosmetics and personal care brands reduced spend by £14m to £439m in the year. Entertainment and leisure brands remained constant spenders at £419m, while motor brands increased spend by 2% to £314m.
The figures represent all the money invested by advertisers in commercial TV across all formats and on every screen: linear spot and sponsorship, broadcaster VOD, and product placement.
There were 837 new or returning advertisers on TV - after a minimum five year break - in 2016, the marketing body claims. New or returning advertisers accounted for 1.6% of total TV ad revenue in 2016, according to Nielsen.
Of TV’s biggest advertisers, consumer goods giant Procter & Gamble was the most viewed brand in 2016 with 34.8 billion views on TV, 14% more than in 2015, as measured by BARB.
It was followed by Sky, which accumulated 24.6 billion views, Reckitt Benckiser at 21.2 billion views, BT at 15.7 billion views and Unilever at 14.6 billion; a significant 28% decrease from 2015.
Moving forward, TV ad spend is tipped to grow 1.6% in 2017, according to WARC estimates for the Advertising Association.
Lindsey Clay, chief executive of Thinkbox, said: “Advertisers invest in TV because it works. TV is a trusted environment for brands. It is a place they want to be seen, where they can rub shoulders with high quality shows that are important parts of people’s lives. Its trustworthiness and quality are two of the reasons why TV is the most effective form of advertising.
“TV advertising creates huge effects instantly as well as building and maintaining profitable brands for the long-term. For online brands in particular, which have little or no physical presence, TV’s ability to create emotional connections with large audiences is vital. It helps make them feel less virtual and more real.”