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Online-born businesses fueling TV advertising ‘tipping point’

The marketing body for commercial TV in the UK calculates that £559.9m was invested in TV advertising by online businesses

An e-commerce explosion is delivering knock-on benefits for traditional TV advertising spend, seeing an influx of online-born businesses, according to analysis conducted by Thinkbox.

The marketing body for commercial TV in the UK calculates that £559.9m was invested in TV advertising by online businesses between January and July 2021, an increase of 37% from the equivalent period in 2019. This upward trend is broad-based with virtually every business sector fueling demand, placing the prospect of crossing the £1bn per year threshold within reach.

Big risers include online used car services, which are up 235% on 2019, while online food delivery services are north to the tune of 194%. Other generous spenders include social media companies, which splashed out £10.6m on TV ads for the period versus nothing at all in 2019.

The figures are particularly impressive as Thinkbox only counts online-born businesses in its figures, those companies which trade digitally and with no prior bricks-and-mortar experience. Together this group constitutes the largest category of TV advertisers this year, accounting for 20% of all linear TV ad spend through the survey period.

By comparison, the next closest sector, food, languished at 10.1%, with finance and entertainment & leisure bringing up the rear on 8.5% and 7.2% respectively.

Matt Hill, Thinkbox’s research and planning director, commented: “Online-born businesses using TV has been a feature of advertising investment in recent years. But what we’re seeing is a dramatic shift in momentum, a tipping point.

“There are some clear reasons behind this boom. Online-born businesses need to use TV as a shop window for their products and services. They also benefit from TV’s signalling strengths, which convey trust, quality and credibility – attributes that are vital to the virtual. And the relaxation of booking deadlines for TV has undoubtedly helped too. But, above all, online-born businesses enjoy TV’s traffic-driving ability, something they experience in real-time and can easily observe through Google analytics.”

Extrapolating these trends to the end of the year, TV advertising spend could close out 2021 ahead by as much as 18% from 2020, more than compensating for an 11% pandemic-related decline, with ITV emerging as the chief beneficiary.

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