Tag Archives: Ofcom

Ofcom’s ‘most missed’ media misses the point

Which would you miss most: your iPod, iTunes or music itself? Let’s say you are only allowed to take one with you to a desert island. Stupid question right?

Today, you may have read about a survey by the usually very helpful and insightful Ofcom. It asked a similar sort of question. It found that young people say they are more likely to miss mobile phones or ‘the internet’ above TV. This is the first time TV has not come top of Ofcom’s most missed for younger people (it is still top overall). Inevitably, this has been seized upon by some as a worrying sign for TV. Read more on Ofcom’s ‘most missed’ media misses the point…

Calm down dear, it’s only a commercial

Knickers are getting twisted again. The Rasputin-like myths around TV ad-skipping will not lie down and die.  If ‘ad-skipping’ is a problem, how come we’re watching a record number of TV ads at normal speed in the UK (2.6 billion a day)?  The answer is the bleeding obvious: ad-skipping is not such a problem.

But you wouldn’t know that if you listened to some of the commentary around recent developments in TV, namely the arrival of product placement in UK-originated programmes from next Monday; a recommendation by a House of Lords committee that the number of minutes of TV advertising should be reduced; and Ofcom’s announcement this week that terrestrial commercial television broadcasters will be allowed longer advert breaks during dramas.

We thought we had done a reasonable job explaining the (minimal) impact of digital recorders like Sky+ or Freeview+ on the number of ads being watched, but we were maybe a bit too optimistic. Some recent commentators have insisted on making a link between ad-skipping and changes to TV advertising, as though every change is some sort of reaction to ad-skipping. But there is no link.

What makes it all the more irritating is that the facts are so freely available, and not just from us, should anyone bother to check. Ad-skipping seems to be the one issue where commentators don’t feel they should check the facts; instead they rely on what they reckon might be happening based on what they and their circle are doing.

If anyone reading this has been asked to write an article, appear on a radio phone-in show or a 24 hour news channel on the subject of TV advertising and they suspect they might get asked about the topic of ad avoidance please, please ring us for an up-to-date briefing.

In the mean time, here, once more with feeling, are the facts:

* Linear TV viewing in the UK reached a record high in 2010 of over 4 hours a day per viewer on average.  An additional 1%-2% is watched on-demand online.
* Commercial TV accounts for nearly two-thirds of viewing, so the viewing of ads – at normal speed – has never been higher.
* The average UK viewer watches 46 ads each a day at normal speed (and collectively the UK watches 2.6 billion a day).
* The number of TV ads watched is about 35% higher than in 1999 and 23% higher than 2005.
* Recorded viewing represents just 7.3% of all TV viewing. 92.7% of the TV watched in the UK cannot be fast-forwarded.  Two-thirds of ads are fast-forwarded in recorded viewing, so overall 4.8% of ads are lost to ‘zipping’.
* In homes that own a digital recorder (48% according to Ofcom), recorded viewing is higher, but still only 14% (this has decreased from 16% two years ago).
* According to data from Sky+ households, when people get Sky+ they watch 17% more TV and, as a result, watch more ads than before they owned one.
* BARB does not count any ad unless it is viewed at normal speed, so those that are fast-forwarded are free to advertisers, though clearly there is value in seeing them.
* ‘Zapping’ ie switching channels at ad breaks has always been a way of avoiding ads but the minute by minute BARB measurement properly accounts for this so advertisers only pay for people watching their ad.
* Research by Thinkbox and others has shown that viewers invest in digital recorders because they enjoy watching TV and want to capture more of it, not because they militantly want to fast-forward the ads.
* Many people, of all ages, enjoy lots of TV ads and will go online after seeing them on TV and watch them again, recommend them to friends, comment about them on Twitter, or join a Facebook groups for them.  Unsurprisingly, they like good ads a lot more than average ones (though even the average ones work and make brands famous ref our heading).

Read more on Calm down dear, it’s only a commercial…

The good news: TV won’t ever ‘overtake’ the internet.

Cast your mind back. You may remember a year ago when our cheeky cousins at the IAB announced that internet advertising revenue had finally ‘overtaken’ TV advertising revenue in the first half of 2009. This prompted some ugly triumphalism from internet fundamentalists and telly was given a right old kicking in the press. A year on our bruises have healed, and we’re all friends again.

But guess what; various press stories appeared last week using the 2010 first half figures from the Advertising Association to state that apparently TV had ‘overtaken’ the internet again. In the first half of the year TV had 25.5% share of advertising spending, and ‘the internet’ had 24.3%. Whoopee, you might expect us to say; boo-sucks to the internet, reap what ye sow, don’t throw stones in glass houses, hoisted by your own petard and similar sanctimonious retributions.

Except we are saving our celebrations for something that actually counts. At the risk of repeating myself, on the anniversary of TV’s trashing  and while ‘online advertising’ spend is fresh in our minds, I would like to revisit why the ‘who is the bigger medium?’ question is the chocolate teapot of media debates.

It is not comparing like with like

TV is a medium, the internet is not; it is a fantastic technology that enables a variety of activities, from banking to shopping to email to TV to radio to newspapers and all things in between. It would be like naming everything that uses print technology – from posters, door drops and catalogues to directories, magazines, DM and newspapers, not to mention phenomena like books, leaflets, or letters – a single medium.

‘Online advertising’ doesn’t exist
There is no single thing called ‘online advertising’; it is a confusing catch-all term for the wide variety of very different types of advertising, including online search, display, social media and classified advertising. These are mature enough now to be looked at individually, as people do with the different forms of print, not lumped together. Aggregating revenues from such disparate disciplines in order to create a PR-able big number is meaningless.

TV *hearts* the internet
I never tire of saying this. TV advertising and most forms of internet advertising are genuinely not in competition. Search – by some margin the biggest medium within the internet sector – and email marketing do completely different things for advertisers and are wholly complementary to TV. Google calls it a ‘special relationship’ and this was underlined by our joint research with the IAB.  Online display formats of course can be substitutes for TV, but the fastest growing one is … online TV.

TV is available on the internet
The increasing convergence between TV (the content) and the internet (the technology) makes comparing the two fundamentally flawed. TV will be increasingly watched via the internet, broadband connected TV sets are launching, and the most attractive and effective part of online display to advertisers is the advertising spaces around on-demand TV.

If you still care about what the biggest advertising sector is, it’s print

If the same methodology of aggregating revenues from different types of advertising that use one particular technology was used generally, then ‘print’ would remain the biggest advertising sector. TV advertising and ‘online advertising’ never have been, and neither is now.  TV however is the biggest display medium by a wide and increasing margin. 

Online never ‘overtook’ TV anyway
Ironically, despite what the IAB announced a year ago, ‘online advertising’ never finally ‘overtook’ TV in 2009. If you want all the numbers here goes…

Ofcom’s figures, the most reliable source, list net TV revenue in 2009 at £3.136bn. Expressed as a number gross of 15% agency commission that comes to £3.689bn. The Advertising Association figures are generally listed gross of 15% agency commission for all media. They have 2009 TV spot revenue only at £3.525bn gross, plus listed separately is £160m of TV sponsorship.  Together that comes to £3.685bn gross, almost exactly Ofcom’s number.  The AA uses the IAB’s self-published figure for ‘online advertising’ of £3.541bn gross in 2009. 

There you have it: TV (excluding online TV) took £3.685bn in gross advertising revenue in 2009 and the whole online sector £3.541bn gross.

It gets confusing because the AA separates TV sponsorship from spot and lots of people get mixed up between net and gross (including some very large media agencies). So TV wasn’t overtaken it seems, so therefore can’t have regained some spurious position it never lost in the first place. 

But we genuinely don’t care
Who does?  We haven’t made a big deal out of this ourselves because, however tempting it might be, we are not in the business of comparing the two (Ok, apart from right now, but that’s only to show how fatuous it is). TV’s share of total and display advertising rose last year (as it also did in 2008), which might have justified a bit of showing off.  But when TV revenues were down nearly 10% it seemed a bit sick to get excited.  A year will probably come again when the online sector grows faster than TV but we’ll still be happy as long as it’s not at TV’s expense.

Real reasons to celebrate

2010 is a different issue.  Display advertising has come back strongly this year.  All media that are brand building are doing better, from cinema to outdoor. TV revenue seems to be growing by more than 12% and faster than any other medium this year.  All of 2009’s revenue decline will be regained .  Now those are facts we are happy to say ‘Whoopee’ to.

Read more on The good news: TV won’t ever ‘overtake’ the internet….

Nike’s Glee?

The nauseatingly cute and diverse young cast of Glee has been summoned to the White House to perform for the Obamas this Easter. But our favourite character from the show won’t be there; Sue Sylvester (actress Jane Lynch) will be busy washing her Adidas track suits.

Read more on Nike’s Glee?…

You get what you pay for

They were not quite Christmas presents but, in the past month or so, three pieces of independent research have landed on my desk, all of which run counter to the prevailing wisdom (cf. Chris Anderson) that ‘free is best’ and paid for media have had their day.

The first piece of research came from Kantar Media (part of the WPP Group) who looked at consumer willingness to pay for different media experiences. They looked at willingness to pay for content across newspapers, radio, mobile phone, internet and television.

Read more on You get what you pay for…

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