At Toading we’ve been predicting the decline of TV advertising for some time. But the latest figures are quite shocking. All of a sudden, in a landmark moment for digital media, Ofcom’s UK Communications Market Review has rocked the industry by admitting that online advertising spend has finally exceeded that of advertising on mainstream TV. A gob-smacking growth of 40% has seen £2.8 billion dedicated to online versus £2.4 billion of the combined revenues of ITV1, Channel 4, S4C and Five as well as six times the size of spend on radio and as much revenue as all outdoor and magazine advertising combined!!
Incredible. For now, though, online is still hovering in second place. Press advertising is in front, commanding a more than respectable £4.7 billion of the £14.9 billion total UK advertising spend.
Another point I find interesting is that the UK accounted for a higher proportion (18.9%) of total 2007 advertising spend than in the USA, France, Germany or Italy. Paid-for search makes up the biggest chunk of UK internet advertising revenue, speaking for £1.6bn of the total £2.8bn. Online display advertising revenues weigh in at a hefty £600 million, expanding by 29%. This actually means the growth of advertising is outdoing inflation for the first time in the UK since 2005.
The picture for TV advertising is much more bleak. As a category it has remained depressingly flat, though in the case of the three commercial public service broadcasters, it has fallen 16%, ITV1 being the hit the hardest.
With 23% of households now owning a digital video recorder (DVR), it makes no surprise that 88% of those respondents confess to generally fast-forwarding through commercial breaks when watching recorded programmes. This comes on the heels of a McKinsey study claiming that ‘traditional TV advertising is set to be a third as effective in 2010 when compared to 1990.’
As consumers spend more time at home on the PC, while also preparing for the inevitable credit card frenzy in the run-up to Christmas, online advertising specialists will be confident that they have the answers that TV is failing to provide.
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