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TV Media Planning Tv Ad Spend Future of TV

67% of advertisers plan cuts to TV spend: mass retreat or simply a ‘rebalancing’?

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By John McCarthy, Opinion Editor

November 21, 2022 | 6 min read

Thinkbox has hit back at a report from Isba warning of a cut to TV ad spend, saying the research simply shows the industry is undergoing a “rebalancing.”

tV cuts

Thinkbox’s chief executive holds faith in ‘resilient’ TV ad spend while 67% of brands hint at cuts

The survey of 59 advertisers conducted by the Incorporated Society of British Advertisers (Isba) and media investment analysts Ebiquity found that linear TV ad spend will bear the deepest budget cuts. 67% said they plan to make cuts on broadcast TV – a channel where they tend to put a lion’s share of spend. Meanwhile, four in 10 chief marketers said they planned to lower investment in traditional media such as TV, radio, print and outdoor.

The research surveyed some of the UK’s largest advertisers and found that commercial broadcasters such as ITV, Sky and Channel 4 bracing for tough times.

Phil Smith, the director general of Isba, added: “The survey clearly shows the impact of the recession on the spending plans of major brands. There’s a general shift towards more flexibility of commitment and a significant swing towards digital delivery in every medium.”

But Lindsay Clay, chief executive for Thinkbox, the marketing body for commercial TV, downplayed the findings. She responded: “Nothing works harder than TV advertising, but with businesses under economic pressure, it’s no surprise they’re considering their advertising spend. What this survey shows is that most plan to invest more in broadcaster VOD and less in linear TV. This is a rebalancing that has been happening for a while. They’re changing how they use TV as it evolves. Total TV advertising will be resilient.”

She added that a decrease in demand from advertisers may be the perfect time for some brands to invest, with prices likely to decrease upon current levels. “This is an opportunity and competitive advantage for those advertisers who can still invest. It also opens the door for brands that might not have thought they could be on TV before – which is what we saw during the pandemic.

“All the evidence shows that maintaining advertising in a downturn is the best way to emerge from it quicker and stronger, but this isn’t always possible. We hope that advertisers examine the evidence of what media offer the best value for money, the least risk and the greatest return. Free tools like the Media Mix Navigator are there to help inform investment decisions with impartial data.”

News that the UK has slumped into recession has set marketers scrambling to recalibrate budgets for more chastened times. While the loss of linear spend will hurt broadcasters, they are currently seeing high demand in their digital networks like ITVX and All4 as buyers get used to more targeted buying. Spend may also pursue logged-in BVOD viewers to cut out on wastage, especially while belts are being tightened.

In the Isba study, one-third of respondents are intent on upping spend on paid search and social. Another area to see a likely increase in investment is brand-building activities, with 30% of companies surveyed committed to investing for the longer term.

Recent research from Thinkbox and numerous media agencies finally proved that ad campaigns that use linear and BVOD tend to be more effective and offer more reach to younger audiences. Broadcasters are undergoing an evolution to reflect the importance of streamed video to their business models. Most recently, ITV refreshed its brand to lend equal weight to broadcast and streaming.

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Any price decreases will be a return to the norm after several quarters of inflated prices. For the brands that can afford TV, there remains value to have.

TV Media Planning Tv Ad Spend Future of TV

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