UK commercial ad spend forecast to rise 5.5% in 2015 after record 2014

U.K. TV advertising revenues topped $7.36 billion (£4.91 billion) in 2014, a 6% increase over 2013 and the fifth year in a row revenues were up. And, spend is expected to increase in 2015.

Thinkbox, the marketing entity for the main UK commercial TV broadcasters – Channel 4, ITV, Sky Media, UKTV and Turner Media Innovations – said the $7.36 billion was a record.

“This is the fifth consecutive year that TV advertising revenue has increased in the U.K. Confidence in TV advertising reflects its unrivalled ability to create business profit and sales,” said Thinkbox CEO Lindsey Clay. “It is also a testament to the brilliant content invested in by the U.K. broadcasters and the unique qualities of TV as a medium. No other form of advertising can do what TV does. And, as TV viewing evolves to become more flexible for viewers, this is opening up new opportunities for brands to harness its power.”

The revenue figures represent advertising spend in commercial TV, including linear spot and sponsorship, broadcaster VOD and product placement.

Thinkbox said commercial TV remained the bedrock of TV viewing in the United Kingdom, with viewers spending nearly two-thirds (66%) of TV viewing on commercial channels, about 2 hours 25 minutes daily.

Viewers watched about 45 ads a day – seven ads more a day than 10 years ago, but commercial impacts – the number of TV ads watched at normal speed – during 2014 decreased by 3.3% compared with 2013. And, they’ve increased 27% over the last 10 years.

And, said Thinkbox, ad rates – in real terms — continue to decline; they’re about 40% cheaper today than 20 years ago.

As the battle for viewers has heated up, ad spending on commercial TV has come from an unexpected category: subscription video on demand services like Netflix and Amazon, and even Google.

In fact, said Thinkbox, based on data from Nielsen, when online brands and services are grouped together they form the second biggest spending category on TV. The category has more than doubled its TV ad investment to more than $598.8 million (£400 million) since 2010.

Nielsen said Amazon and Google each invested $15.7 million (£10.5 million) in TV advertising in the U.K. for their online services in 2014, and Netflix invested $12.73 (£8.5 million).

There were 800 new or returning advertisers to TV in 2014 (returning after no TV advertising for at least five years), based on Nielsen and Sky’s AdSmart data.  Notable new or returning investors were Ryanair, Booking.com and Swinton Insurance.

Using figures from an Advertising Association/Warc forecast, Thinkbox said TV advertising investment is forecast to grow 5.5% in 2015.

Stay tuned.

Jim O’Neill is Editor of Videomind and Principal Analyst at Brightcove. You can follow him on Twitter @JimONeillMedia and on LinkedIn