Red-hot ad market and spiraling inflation push UK TV ad spend to record heights

Online brands back TV in a big way

• While all major categories increased their TV spend, it is ‘online-born’ businesses that steal the show, opening the spending spigots to the tune of £1.12bn – an increase of 42% and the equivalent of 20% of all linear ad spend

• Driven by the pandemic necessity of e-commerce, the switch proved a match made in heaven for brands lacking a physical presence to drive traffic and name recognition

• Unsurprisingly, the fastest-growing online subcategory was food delivery and subscription services, which spent an additional £58m on TV campaigns year-on-year

• Other spendthrift categories include online marketplaces such as Amazon, eBay and Etsy, which splashed out an extra £35m, and finance including the likes of Clear Score and Experian, which surged by £31m

• The question is how many of these online startups will be around for the long haul, with many still in pursuit of profit and VC money drying up?

Strength in depth

• Reducing its reliance on a few big spenders, 2021 saw 1,286 new advertisers harness television for the first time, or return after a five-year or greater gap, narrowly ahead of the 1,243 new advertisers reported for 2020

• Breaking well into the quadruple digits, the volume of new entrants is markedly higher than the 841 per year average in the period 2015-19

• Among the cohort of fresh blood home security brand Verisure made the greatest impact, investing £10.9m last year

• Other notable entrants include online property portal Boomin (£8.4m) home appliances brand DeLonghi (£3.2m) and seafood provider Mowi (£2.5m)

TV remains resilient

• Through dramatic changes in spending and viewing habits, television has remained remarkably resilient, benefiting in part from the struggles of competing forms of advertising such as out-of-home (OOH) and cinema, both of which were below their pre-pandemic peaks

• Last year cinema advertising investment was up 70% year-on-year but remained down 69% compared with 2019, according to figures from the Advertising Association and WARC

• Likewise, OOH advertising was up 25% year-on-year in 2021 but down 33% on 2019

What the authors say

• Thinkbox chief executive officer Lindsey Clay said: “TV came back stronger in 2021 than anyone predicted – surpassing pre-pandemic investment levels – and there are many factors driving its return to growth.

• “Yes, the short-term bounce back from the pandemic, but also its revitalization by new advertisers; established advertisers re-evaluating TV; and advanced advertising solutions making it an attractive investment for a wider range of businesses.

• “And we should acknowledge that the huge increase in advertiser demand last year, coupled with a return to pre-pandemic viewing patterns, meant that TV’s price increased. This will also have contributed to its growth.”

• A recent TV in focus event organized by Thinkbox saw accelerating ad price inflation emerge as the single biggest challenge facing media buyers, which has its part in driving the record income for TV providers