7 insightful slides exploring UK TV advertising in 2023
Thinkbox’s ‘A Clearer Picture’ conference steered UK advertisers through the world of TV as inflation bites. Here are the best bits.
Jill Scott winning I’m a Celeb was 2022’s most watched show
On February 28, Thinkbox explored several trends in TV, like inflation’s effect on ad pricing, the plateauing power of streaming and how to reach people falling out of the habit; all questions on the tips of marketing tongues.
Inflation/recession – is TV good value?
Matt Hill, research and planning director at the commercial TV body, explored a decade of TV ad pricing to understand how much value it provides. ITV did today say that marketers are cautious and are protecting profits ahead of economic uncertainty later in the year. It is a theme preying on minds right now.
Hill mapped CPMs against the CPI (the cost of goods) since 2010. Product prices are up about 40% in that timeframe. For ABC1 adults, TV pricing remained in line with that generally; although, during the pandemic when demand fell, there were bargains to be had.
But there’s an issue. The viewership fragmentation that has occurred in that time has made younger people (who are more likely to view other things or on other devices) more expensive to reach by around a factor of three.
Hill points to BVOD, however, which has remained consistently priced for the last decade, despite making huge advances as a keen way to top up these audiences. Using targeting, that younger audience can be reached during their more fleeting TV consumption. The rising costs of linear TV can be balanced out by topping up campaigns with targeted BVOD. “TV is definitely still more expensive [than it was],” but it is also doing a whole lot more than it was in 2010 for advertisers too.
During this recessionary period too, the brands that can afford to spend will enjoy a higher share of voice. He pointed to TV’s biggest food advertisers. The top spenders upped their costs, and the mid-tier defend theirs, still enjoying a greater share of voice, due to some of the smaller brands disappearing from TV completely.
Aldi, he said is the biggest spender in food as of January 2023. From a market share of 10%, Aldi was enjoying a disproportionate 30% share of voice on TV. He points out that roughly for every extra 10% share of voice, some sectors see a 0.5% growth of market share. While strictly not true for food brands due to a factor of reasons, it’s clear that Aldi is intent on growth during this recessionary period and that TV is key.
Hill also pointed out that while discounters like Aldi try to grow their presence, other CPG brands will use their share of voice to sell in price rises. “Share of voice is an incredibly good tool that you can utilize to ensure that you don’t lose a lot of sales as a result of that price going up.”
Is TV still reaching enough people?
Commercial TV broadcasters have the potential to meet more people than ever across numerous platforms. That transformation required them to create services that can operate on other screens beyond TV, and then generate the same level of content that suits the consumption needs of mobile, tablet and on-the-go viewing.
Hill points to broadband advances in the last few years, making all this possible.
That’s not news to anyone, but the news that we're soon to hit a streaming ceiling could be. Now, most people with a connection can manage an intensive TV stream, something that wasn’t the case previously. He cites data claiming back in 2015 only about 35% of the population that had 30mbits packages, i.e. enough bandwidth to stream TV. That’s now around 80% of the population.
He added: “We are hitting sort of the max penetration in terms of the ability to stream TV. It is what makes it possible for Sky to launch Sky Glass, a completely IP-delivered way of watching TV.”
With a majority of Brits now able to stream, the next streaming war will be about growing loyalty and increasing dwell time and visit frequencies.
SVOD versus broad(cast) – what are we watching where?
Hill believes that the streamers’ impact on UK culture is limited, largely to the consumption of movies and dramas. First of all, a lot of that is net-new viewing of drama and movies. On average, Brits watch more of both than in 2015. SVODs have eaten up about 40% of drama viewing time. However, they’re missing entire sectors.
Hill says: “In entertainment, they are having a bit of an effect, but not to the same degree, and in sport, they haven’t really had a big impact.”
Sky Media’s director of planning hinted that sports are one of Sky’s most vital ways of reaching that valued 16-34 demographic. She joked that the group was “fickle,” but 17% of its Premier League viewers were in that demo, helped by efforts to push relevant content across YouTube, Instagram, Snapchat and Facebook. Broadcasters will defend their best sports rights as a means of retaining access to that audience.
Furthermore, streamers haven’t been able to muscle in on TVvs grasp of documentaries, hobbies and leisure, nor news, and with the exception of YouTube, there has not been a huge impact on kids’ content either.
Is the streaming ceiling ahead?
75% of the UK public now have access to Netflix (although a clamp down on password sharing could reduce that). Steaming has a huge global footprint, but nationally, its impact ’t quite been as disruptive to broadcasters as many would assume.
Around 15 million people on average per day watch Netflix for just under two hours. The BBC was around 25 million viewers per day for two hours. Live, and locally relevant, content still has a strong draw.
When bundled, the UK’s commercial broadcasters reach just under 35 million people on average per day, hitting an average of around three and a half hours. Among that are 5 million 16-34-year-olds – which isn’t nothing in the grand scheme of things, but less than they would like.
Reaching light TV viewers
Where the world of CTV and sharing video comes to play is they represent chances for marketers to reach again the 16-34 demo that TV’s lost its bond with.
“Some only watch a one-hour-long show per week, they’re really hard to find. To get those viewers, we’re going to want to plan across the video-sharing platforms and find them in a different environment.”
AVOD TV, like Disney+ and Netflix's offerings, could potentially host a valuable trove of viewers, but their impact Hill thinks won't be so strong. His estimates have ad-tier (basic) Netflix viewers at around 5% of the total, spread across the world. And for Disney, the SVOD is likely to shift to ad funding as its default model but promises a low ad load that won’t draw much interest from commercial broadcasters.
Meanwhile, Enders’ Tom Warrington thinks it will be hard for the sector to grow ad viewers. “They will need to entice consumers who have been conditioned for a decade by streaming to consider ads as a hindrance and something to be avoided.”
He also looked into the growth of Fast channels and outlined it as a low-cost gamble for media owners due to low operation costs. “When it comes to Fast and AVOD ad tiers, the growth essentially depends on whether a large volume of consumers would choose to pay less or nothing at all for worse products and experience and they're currently getting.”
And to conclude, here’s an insight into the most-viewed shows of 2022. Streamers struggle to bat against that linear bump broadcasters are still seeing on their top properties.
It’s a question that will be weighed up during a cost of living crisis. But Warrington pointed out that TV spend is one of the last things cut from the budget during these times (having solid TV entertainment on tap is still cheaper than cinema/bars or other forms of recreation). This eventual balance will shape what UK TV looks like in the coming years.