May 2019

This month the marketing body for the main UK commercial TV broadcasters, Thinkbox, released A Year in TV, its 2018 annual review, with some eye-popping facts.

Though many people think TV is dying faster than characters on Game of Thrones, TV advertising accounts for 94.6% of the video advertising people see, and for 71% of the business profit advertising generates as a whole (Ebiquity/ Gain Theory).

UK TV ad revenue totalled £5.11 billion last year, matching that in 2017, with 867 advertisers either “new or returning” (ie after a gap of at least five years) to TV in 2018. This number was boosted by the increase of online brands, with companies such as Amazon, JustEat and GoCompare investing particularly heavily (to the sum of £760m over the last three years) to become TV’s dominant advertisers.

Research and strategy consultancy MTM’s Age of Television study found that whenever we watch TV video, we are doing so to satisfy one or more of eight different needs.

For example, live viewing such as sport, is driven by a need to keep in touch and experience viewing with others. On-demand viewing allows us to escape into content such as reality TV, while primetime dramas (more likely to be time-shifted) allows viewers to unwind and be distracted.

Though we watch as much TV as ever, how we watch is changing. 48% of the UK lives in a household with access to a subscription (SVOD) service such as Netflix and Amazon, rising to 62% of 16-34s.

These services may compete with broadcasters for younger audiences, but don’t directly replace the traditional platforms; only the heaviest 20% of Netflix users watch more Netflix than broadcast TV.

This change in habits emphasises how broadcaster VOD (BVOD) is seen as a necessity, not a luxury. Linear TV is still the largest video medium at 76%, followed by SVOD (9%) and BVOD (6%). Facebook video is flat, accounting for 1.1% of total viewing in 2017 vs. 1.2% in 2018 – compare this to 69% of all video viewing on television.

New forms of online video have brought new users: videos for practical tasks (such as “How-To DIY” videos) or distraction attract many views. TV viewing dropped overall among young audiences (16-34s) year-on-year (50.1% in 2017 to 45.1% in 2018) but it still dwarfs other platforms, with this 5% drop moving to BVOD, SVOD and YouTube.

Once again Thinkbox’s 2018 review highlights the important role television retains in the media landscape. As well as providing mass reach, TV drives fame and builds trust for advertisers, and an immediate short-term impact for brands – particularly those that rely heavily on digital marketing. It impacts our emotions, providing intrinsic benefits and an escape from the hustle and bustle of daily life.

As our consumption habits alter, advertisers can earn incremental reach increase effectiveness by adding video-on-demand to a linear television campaign. As online video attempts to take the jewels from TV’s crown, it’s clear the latter is still sat on media’s iron throne.

Lush caused a stir earlier this month when it announced that it would be closing down several of its UK social media accounts having become “tired of fighting with algorithms”.

Having made the announcement at the same time as other brands are investing more in social media, and given its 220,000 followers on Twitter, 569,000 on Instagram and 423,000 on Facebook, it has come as a surprise.

While the business will feel it knows its customers best, having so many followers could suggest customers want to communicate on social media. Closing them makes this audience harder to reach and could even make them feel neglected.

A subsequent post from the business, however revealed more insight into the thinking; its organic (unpaid) content was only reaching just 6% of followers, a frustration that many brands will surely relate to. Given Lush doesn’t pay for advertising, and therefore can’t drive paid reach, the benefit of using resource to maintain these accounts is not as immediately clear.

Additionally, Lush is known for taking an ethical public stance on social and environmental issue – in stark contrast with Facebook in particular, which has faced fierce public criticism in recent years for its ethics. Distancing themselves from social media aligns with their brand values, and created a significant amount of PR value.

A final factor may have been the heavy criticism Lush received on social media last year in response to its ill-conceived ‘anti-spy cops’ campaign. It’s been scalded by social, yet not reaped the benefits.

With its newly freed up resource, Lush is intending to invest more into its owned channels, where it sees better engagement and can reduce reliance on third-party platforms. The company also says it will continue to use hashtags, such as #LushCommunity, so it hasn’t completely ended all social conversation, but it’s difficult to imagine how effective this will be in practice.

Lush closing its social accounts in a blaze of publicity may prove to be a shrewd and well-considered strategic move, but it is not without risk and hard to find a way back, should the company have a change of heart.

Any brand considering the same approach should evaluate the impact it will on their own business – and whether the risk outweighs the potential reward.

Avengers Endgame has been a huge commercial success, smashing multiple box office records. It became the 17th highest grossing film of all time, after just five days.

Far from a lone success story, this is just one example of an industry in rude health with successes in multiple genres. IT (2017) is the biggest box office horror film of all time, Frozen (2013) the biggest family release of all time, and Deadpool 2 (2018) is the highest-grossing R-rated movie of all time.

While streaming is changing the entertainment business, its effect on cinema is seemingly non-existent. You could infer the two have little causality on the other: people still want to view films on the big screen.

Cinema’s growth can be put down to multiple reasons. Firstly, franchises are going from strength-to-strength with Marvel Cinematic Universe, for instance, building a mixture of hardcore and casual fans. Driven by hype and word-of-mouth, blockbuster releases become events in their own right; specialist event cinema such as Rooftop Cinema & Secret Cinema also benefiting from the growing ‘experience economy’.

Many are unprepared to wait for home releases in fear of missing out, while fear of spoilers is thought to be behind 19 of the top 20 biggest all-time opening weekends happening in this decade.

Finally, it is worth mentioning the increase in both the quantity and quality of UK cinemas. There are more chains catering for affluent audiences (Everyman & Curzon), while events such as baby-friendly screenings & theatre showings are bringing wider audiences into multiplexes.

Cinema has always been seen as an effective way to add incremental reach onto TV campaigns. But the channel offers advertisers more versatility and as admissions grow and franchise blockbusters become more commonplace, cinema will gain greater prominence in the advertising mix.

A recently completed audit by the Association for Online Publishing has found that ad-blocking fell to 10.3% last year, from 11.6% in 2017 and 12.5% in 2016.

Whilst encouraging news for publishers at face value, the financial impact continues to increase, with losses up by more than 30% due to the continued rise in online audiences (and available ad impressions).

Desktop ad-blocking has declined from 30% (H2 2016) to 20% (H2 2018), with AdBlock Plus, the company behind the most-used ad-blocker, stating this is due to more people choosing to filter ads rather than block them entirely.  Pop-ups on publisher sites asking users to turn off their ad-blocker, or those that prevent access entirely until the ad blocker is turned off, also appear to be working. Audiences increasingly accept the value exchange of good-quality, non-intrusive ads for free content on premium publisher sites.

Ad-blocking on mobile has grown but on a smaller scale and from a smaller base, doubling from 1.2% to 2.4% between Q4 2017 and Q4 2018, a figure that we can expect to rise as users demand increased privacy protection and control over their browsers. Alternative browser Brave, with built-in ad blocking, continues to grow in popularity, passing 10 million Android downloads in Jan 2019.

While the prevalence of ad-blocking is slowing, it remains a concern for publishers. Already significant losses may widen with new updates to Chrome and Safari – and the launch of Apple’s anti-tracking software ITP 2.2 later this year.

Publishers should take note of the lessons learnt on desktop and focus on creating ad experiences that are as high-quality and non-intrusive as possible, whilst being transparent and open with their audiences about the benefits of an ad-supported business model.

As ITV cancelled The Jeremy Kyle Show in May after a contestant died in a suspected suicide, it’s been suggested that this has left an £80m hole in its advertising revenues. The talk show, which held a regular morning slot on ITV from 2005, saw host Jeremy Kyle and psychotherapist Graham Stanier discuss guests’ personal issues in front of a studio audience.

Accounting for 13% of impacts across ITV2 and 3% on ITV (BARB Jan-April 2019), it was a commercial success: according to The Guardian’s analysis, with a 30” spot on ITV1 costing an average of £12k, the show would have generated £328k a day, £6.9m a week and £83.6m a year, before taking ITV2 repeats into account.

With MPs such as Charles Walker MP stating the format was “not compatible with a responsible society and a responsible broadcaster” ITV has been praised for removing the show from all its stations, platforms, and YouTube. Replaced in the short-term with antique show Dickinson’s Real Deal, which delivers just half the audience, ITV is expected to extend This Morning and start Loose Women earlier in the day, before launching a new replacement show in the autumn.

Whilst a significant change in the schedule, ITV is not expected to suffer commercially. Due to the way the UK TV trading market works, falling audiences increases the costs of accessing airtime. And with new series of Britain’s Got Talent (audiences up 7% YOY), Love Island, and The Rugby World Cup set to air in the next few months, ITV has plenty more to offer advertisers.

The issue has posed wider questions about the welfare of reality TV contestants, following the deaths of former contestants Sophie Gradon & Mike Thalassitis. The Love Island production team has announced new ‘duty of care’ guidelines ahead of the launch of its fifth series, where contestants will receive ‘proactive contact’ from the production team for 14 months afterwards.

Given TV’s substantial reach, and the loyal audiences reality shows attract, it’s commendable to see ITV take greater responsibility and acknowledge its influence on popular culture.

Agencies and advertisers had been eagerly awaiting the latest release of the IAB’s ad spend report for 2018: an opportunity to assess the health of the industry after a year of controversy.  Mobile has suffered a reputational crisis – amid concerns over brand safety, ad fraud and the misuse of citizens’ personal data.

Yet the results paint a picture of health and stability with mobile ad spend growing 31.5% year-on-year to overtake desktop for the first time and claim £6.88bn in UK advertiser spend.

A major factor is that audiences now spend more time on mobile devices than desktop computers. But behind that, mobile’s real drivers have been social media and video: mobile video ad spend grew 45% YoY to account for 76% of all video spend, while mobile accounts for 80% of social media spend – at £2.5bn. Paid search remains flat, however, accounting for 49% of mobile ad spend, down from 50% in 2017.

Despite accounting for just 16% of all mobile display spend “standard display” still grew by 36%. Essentially a mix of tenancy and banner activity (including interstitials, the majority of which wouldn’t pass the Coalition for Better Ads standard) is seems many advertisers still favour quantity over quality and fail to put creative first in mobile advertising

Video ads should be mobile first, vertical and subtitled; and native units should continue to flourish both in and out of feed across social media, as developers update advertising options with product features.

Alongside software innovation, 5G may also present an opportunity to further improve mobile advertising and increase the value of a mobile impression by creating ad experiences that are more suitable for the environment – as data plans increase.

With body image concerns causing a third of UK adults to ‘feel anxious’, and 1 in 8 having ‘suicidal thoughts’, a number of brands took a positive stance during Mental Health Awareness Week (13th-19th May).

Boots’ summer campaign defiantly referenced 2015’s notorious “Are you beach body ready?” campaign, with two friends mocking the ‘perfect’ body image traditionally associated with summer and swimwear advertising.

Advertisers are right to engage: 21% of those suffering anxiety cite body images used in ads as the cause while a further 22% cite body image on social media (rising to 40% among teenagers).

Mental Health Awareness Week saw a number of coordinated media campaigns. Coty and Wellman joined Harry’s (a longstanding commentator on men’s mental health) and ran media partnerships with The Book of Man (a new media brand which aims to celebrate a ‘healthier form’ of masculinity). Media brands are engaging too.

Having defined a wider business strategy around ‘the power of positivity’, magazine publisher Hearst has banned the use of negative language around body image across all their brands. Radiocentre organised a ‘roadblock’ message starring the Duke of Cambridge across 300 stations while The Guardian produced a supplement focused on individuals’ stories to highlight the support services available.  A specially-commissioned ‘locker room’ focused on male mental health (also featuring the Duke) formed the centrepiece of the Football Association’s Heads Up campaign, airing on the BBC as part of a week-long series of programmes. Similarly, Bauer’s “Where’s Your Head At?” campaign aims to lobby government to make changes to workplace culture.

Not every initiative was successful, however. The Prime Minister was accused of hypocrisy after lighting Downing Street green to commemorate the week, despite having made significant cuts to government funding.

As such, the businesses making real traction have committed long-term, and not just through marketing. We can’t expect one week to rewire mental health awareness, but it’s a good place to start.

Just 11% of the UK population “generally like advertising” according to a recent study from Kantar. But this shouldn’t come as too much of a surprise; few of us really like adverts.

What’s changed is that we trust them less, with public favourability dropping from 48% to 28% since 1992 (Credos). Less-trusted advertising makes campaigns less-effective – and this is a cause for concern.

The finger of blame for declining trust has been pointed at the rapid rise of online advertising. The latest IAB figures show that 2018 online spend was up 15% year-on-year, now at a huge £13.44bn.

More spend means more ads; audiences have noticed and are rising up against it. And while traditional advertising (TV, billboards, newspapers) was broadcast, online ads are targeted to individuals, and in mobile (the biggest area of growth), are both personalised and delivered to a personal device.

As Bob Hoffman recognises – “In the online world, everyone lives in his or her own little digi-world. I have no idea what my friends are doing online and what ads they may be seeing… It’s not enough for [an ad] to be seen by a single person or even by many people. Someone has to know that everyone else has seen it, too.”

Yet the industry is heading the other way, with more spend moving to repeated personal targeting, fuelling negative feeling. 73% of internet users report seeing the same ads “over and over again” (Kantar) and over half feel “bombarded by advertising” (TGI).

No wonder that audiences are taking control and avoiding ads: whether fast forwarding on TV, using adblockers (22%) or paying for ad-free subscription services, such as Spotify Premium (40%).

For most people advertising is an interruption: a break in the content they’re enjoying or pre-roll delay ahead of a video. Remembering this is the first step in improving public sentiment. The value exchange must swing back towards audiences.

It’s not enough to know who an individual is before we target them, audiences expect ads to be useful, entertaining or educating; 40% expect entertaining ads (+5% 2011-2019, TGI), while appreciation triples when they feature audiences’ favourite celebrities (16.7%).

This is where we’ve seen huge success with branded content, such as Suzuki’s recent campaign. The latest extension of our long-running IPA Gold-winning partnership with ITV saw content from fan favourites Take That slot seamlessly into ITV’s early-evening weekend entertainment programming.

Work like this not only delivers on average twice the audience engagement but, most importantly, has been proven to drive sales.