GroupM has upped its forecast for UK TV ad revenues this year from 13 percent growth to 19 percent, as results over the past few months have surpassed expectations.
While England’s success at the European Championships provided a foreseeable boost over the summer, GroupM says that September provided a particularly pleasant surprise. Revenues in September were up 28 percent year-on-year, driven by nearly all categories increasing spending. For a lot of categories, spending was even higher than September 2019, representing a complete recovery from the pandemic.
Pandemic “focused revenues back into TV”
There were a couple of reasons for this. Firstly, it seems that marketers aren’t as cautious as might have been predicted. GroupM had built residual pandemic-related caution into its previous forecasts, but actual results from Q2 show this wasn’t reflected in the market.
Plus, pandemic-related practices have helped drive more spend into TV. VideoWeek reported in the early days of lockdown that broadcasters were making operational changes to try to tempt more spend into TV, such as shortening advance booking deadlines. GroupM says these changes have been successful in reducing barriers to entry for some advertisers, “particularly digital-native brands who have been tempted by the ability to conduct short-notice tests”.
And new advertisers are also being drawn into TV as broadcasters put more focus on their connected TV inventory. There’s still plenty of room for growth – GroupM notes that streaming still represents a small portion of broadcast TV media companies’ operating portfolios.
GroupM says that overall, these trends suggest that the pandemic has focused revenues back into TV. And with key categories like finance, travel, cars and retails still yet to return to 2019 levels, GroupM forecasts continued gains throughout 2022.
Economic speed bumps
TV’s strong growth sits in the context of an overall positive outlook for the UK advertising market. GroupM has increased its forecast for total UK ad revenue growth this year from 24 percent to 30 percent, with digital the other star performer next to TV.
And GroupM believes that macroeconomic conditions are favourable for further growth.
UK GDP figures suggest a slowing economy. GroupM says that this is due to economic ‘speed bumps’ such as supply-chain issues, staff shortages, and rising infection rates. But the media agency believes these risk factors are “likely manageable”, and unlikely to prevent continued ad spend growth.