Advertisers urged to rethink TV strategy as pay-to-view watch rates hit 46%

Commercial VOD rates rise to 46% in the UK / Netflix

Analysts have advised advertisers to commit to omnichannel video strategies as the use of pay-to-view TV services upsurges.

Nearly half (48%) of UK adults have watched videos on demand from commercial services in 2018, according to the Office of National Statistics. Only 29% said they had done so in 2016.

The rate of adults accessing online platforms such as YouTube also jumped from 47% to 62%.

The report on internet access in Great Britain has again pulled the value of TV ad spend into question.

Jim Nail, principal analyst at Forrester, said the research should ring alarm bells for brands that have not yet committed to an omnichannel video strategy.

“Traditional television alone is no longer enough to achieve the advertising goals they need to meet to effectively deliver their message,” he said. “This is particularly true for younger segments, ages 18-30. They need to mix traditional TV, online video such as YouTube and over-the-top internet TV.

“The rise of non-ad supported video sources such as Netflix raises another issue: a number of hours where advertisers can't reach consumers at all. And because these services are subscription services, the viewers will tend to be more affluent and younger, which will skew the remaining traditional TV audience older and lower income."

However Lindsay Clay, chief executive of broadcaster marketing body Thinkbox, inspired the industry to take a broader view of the report.

She commented: “Yes people have embraced new ways to watch TV and other video. But shouldn’t we look at where ads are seen and how effective they are? Netflix and Amazon, for example, are welcome additions to our viewing diet but they aren’t very effective for advertisers because they don’t show ads.

"YouTube is popular, but it accounts for 0.9% of the video advertising we see in the UK. TV accounts for 95% - and is responsible for 71% of the total profit generated by any advertising, according to Ebiquity/Gain Theory. I urge people to remember that.”

Chris Anderson, head of film and TV at anti-piracy film Muso, also noted that that the figures did not include “the many hundreds of thousands of people who are streaming TV in the UK through unlicensed services and sites”.

He advocated an alternative omnichannel strategy to media owners and brands.

“Piracy audiences are overlooked by TV broadcasters, streaming services, and regulators to their detriment,” he said. “Piracy audiences are one of the great untapped pools of wealth - they have extremely high intent to access content but are often simply unable to.

“Finding ways to access this audience could be the secret bringing higher profits back to broadcasting."

Britain's biggest commercial broadcaster, ITV, recently announced plans to launch a new OTT service as it seeks to insulate itself from any future slowdown in traditional TV advertising revenue.

Get The Drum Newsletter

Build your marketing knowledge by choosing from daily news bulletins or a weekly special.