Festive advertisers dump TV for online media

15 Nov 2018

UK advertisers are cutting almost £44m from their TV ad campaign budgets in the run-up to Christmas, as a shift in focus to targeting shoppers on digital media could give Google, Facebook and YouTube a bumper festive season.

As the annual Christmas advertising battle hots up – Burberry’s campaign featuring Matt Smith, Kristin Scott Thomas and Naomi Campbell the latest to be unveiled – TV companies are feeling the squeeze.

The UK ad market will benefit from a £6.4bn marketing frenzy in the fourth quarter – £300m more than 2017 and the most ever spent in a Christmas period – but the total amount spent on TV advertising is expected to fall by almost £44m in the final three months of the year.

The fall in festive TV marketing spend has come as a shock. Last week ITV’s share price tumbled 5%when it informed investors of a chilly outlook for Christmas.

When forecasts were released in July, advertising experts had initially expected a 1.6% rise in fourth quarter TV spending. But on Wednesday, those forecasts were revised, and the TV ad marketis now expected to decline by 1.4% in the run-up to Christmas. This means that total spending on TV ads this festive season will fall from £1.48bn to £1.43bn, according to new figures from the Advertising Association/Warc.

Carolyn McCall, ITV’s chief executive, blamed the ad decline on Brexit uncertainty, but advertisers have not cut back on all forms of spending and their total outlay this year is expected to rise by 5% on last year’s record.

Spend on digital media will surge by almost 12% this Christmas to £3.5bn, a £90m rise on spending in the final quarter last year.

The drivers include search advertising, which is dominated by Google and will rise by about 10% year-on-year to £1.67bn. The amount spent on mobile display advertising, predominantly Facebook, will surge by a quarter to £953m. And online video advertising, where Google-owned YouTube has a stranglehold, will jump by 31% to £667m.

Overall, internet advertising will account for 55% of the total £6.4bn that will be spent on marketing and advertising in the final quarter of the year. Two years ago it accounted for 48% of total spend.

Source: Mark Sweeney, Guardian