It matters not which sector you work in, if something has gone wrong since June, chances are it was the fault of Brexit.
Just try it, it’s easy: “_______ happened, due to Britain voting to leave the European Union”. Feels good, doesn’t it?
As sinecures go, doomsayers have only just stopped short of blaming Brexit on Brexit. But time and time again the links are tenuous, unsubstantial, and above all, facile. Just last week a Guardian reporter, gazing through a crystal ball of unnamed sources, predicted “the worst year for TV advertising since the recession” due to post-referendum uncertainty.
Figures out yesterday from the Advertising Association (AA) and Warc prove him half-right – it has been a comparatively bad year for investment in TV spot advertising, and forecasts for 2017 have been revised down. But to blame Brexit uncertainty is to miss the point; the advertising industry is booming.
UK ad spend is at an all time high, driven by digital. As an average across all sub-sectors, overall advertising expenditure is forecast at 5.2 per cent growth in 2016, 0.4 per cent ahead of forecast – and, “despite economic uncertainty before the EU referendum.”
Although investment in traditional formats such as national newspapers, radio and direct mail took an expected hit, the digital drive more than made up the losses across the industry. Online video saw a staggering 66.4 per cent growth; native advertising is up 29.9 per cent, with digital out of home (OOH) just behind at 28.9 per cent.
This year has seen traditional TV spot ad spend increase, but below forecast at only 1.5 per cent, emphasising the sea change from traditional to digital services. Despite the decline, and despite what internet propagandists like myself might tell you, TV isn’t dead. It’s just not number one anymore.
Of course, “it would be foolish to be talking about the death of spot TV advertising”, says Antoine de Kermel, managing director EMEA at TVTY. “The biggest moments for consumers will always be broadcast live – over 9.6 million people watched Wales in the Euro semi-final, and over 7 million tuned into this year’s X-Factor – mass audiences will always attract big brands.”
TV advertising isn’t going anywhere, brands and advertisers are simply putting their money elsewhere. Ad spend on Video on Demand (VOD) services such as Netflix and Amazon Prime has rocketed 17.1 per cent, as consumers increasingly favour the choice and flexibility of instantaneous digital formats.
According to last year’s Media Consumer report from Deloitte, the UK TV industry, traditionally resilient to change, “now faces the same radical digital disruption as other parts of the media industry”.
The average amount of linear TV minutes watched in the UK is declining, and accelerating as it does. It fell 1.5 per cent between 2011 and 2012, five per cent from 2012 to 2013 and six per cent from 2013 to 2014. At the same time, overall media consumption grew from 528 to 667 minutes per day, meaning that linear TV’s share of consumption fell from 42 per cent to 29 per cent between 2010 and 2014.
It’s clear that although yes, investment in TV spot is in decline, the decline is Darwinian and overdue; linear television simply isn’t top of the food chain anymore. In the age of the “always-on” consumer, the mass, untargeted, one-to-many distribution of television ads is outmoded, and won’t cut it for much longer.
Brands are looking to invest in advertising that targets customers effectively, ultimately delivering the content that is most appealing and engaging to each consumer. For this reason, online ad spend is predicted to increase 15.7 per cent over the next year, to reach £9,947bn – nearly double that of television. “Brands are investing millions to capture the hearts and minds of consumers using online video because it offers much more than an audience sitting on their sofa”, says Bertrand Quesada, co-founder of Teads.
Undoubtedly, eventually, programmatic TV advertising will break free of the confines of VOD and reinvigorate the industry; the student will become the master. Brands were uncertain about the effectiveness of TV spot before Brexit. To suggest a referendum result is entirely to blame for the slender decline in TV investment ignores the continental drift of the adland Pangea.