The UK may only be a small part of Europe’s advertising economy, but the fact that both TV and radio advertising were significantly down during 2006 in the UK, suggests that elsewhere in Europe, much the same thing would have been going on.
The figures were released in the Advertising Association’s Advertising Statistics Yearbook 2007, researched and compiled on its behalf by the World Advertising Research Center (WARC).
Spending on TV advertisements fell by 4.7%, and by 7.7% for radio, with television expenditure down to £4.6 billion ($9 billion), its first annual decline since 2001. This perhaps forms the backdrop to ITV’s recent aggressive moves to put all of its programming on the internet, simulcast with TV, trying to recover the shortfall in advertising revenues by selling internet advertising.
Advertising on the internet in the UK now makes up over 10% of the total and this grew during 2006 by 47% to £2 billion ($3.9 billion). At that rate of growth, online spend will outstrip TV spend in two to three years.
In total the UK seems to love advertising in the press and this accounted for 43.7% of advertising revenues compared to TV on 24.1%, followed by direct mail (12.2%), internet (10.6%), outdoor (5.7%), radio (2.8%) and cinema (1.0%). In other countries such as the US, the TV total is closer to 42% and the radio total closer to 20%.
Meanwhile the US broadcast TV Upfront for the Autumn season has come around again with gloomy predictions that despite the general feelgood factor on the quality of the programming, ad revenue that will be promised will be less than last year’s $9 billion. There does appear to be one concession however, that given the continued rise and rise of Digital Video Recorders, now present in 17% (compared to last year’s 11%) of all US homes, there is a consensus that at least some of the programming viewed on the DVR should count towards advertising effectiveness.
Last year the advertisers pushed for no DVR viewers to count because of the amount of advertising that is fast forwarded when watched on a DVR. Nielsen Media goes to the trouble of counting who does and who does not view programs later, but not who fast forwards through advertisements. The broadcasters were after counting anyone that watches a program within 7 days of it being recorded, and a compromise appears to have been struck, where those watching a program within 3 days will count. This will have the effect of stopping a huge gaping hole appearing in the national broadcast revenues, which would have got wider each year as DVRs are purchased in more households.