Advertisers Enter the Christmas Spirit Despite Cooling on TV

Dan Meier 09 November, 2023 

Advertisers are set to open their wallets this Christmas season, according to the Advertising Association (AA) and WARC, forecasting a record £9.5 billion ad spend during the festive period.

This marks a 4.8 percent increase from last year’s £9 billion, a previous record sum for the UK advertising sector. The uptick points towards optimism around shopping habits this Christmas compared to last year, when consumer spending was hit particularly hard by rocketing energy prices.

Research from Deloitte suggested 26 percent of UK consumers are planning to up their Christmas spending this year, up from 19 percent in 2022. And according to the survey, 32 percent will take advantage of promotional events in November, such as Black Friday and Cyber Monday.

Frosty reception

But ad spend continues to fall away from linear TV, despite the channel’s significance during the ‘Golden Quarter’. According to the AA and WARC, TV spend is expected to drop 0.2 percent YoY, totalling £1.5 billion during Q4 2023.

While the decline can be partially attributed to unfavourable comparisons to last year, when the FIFA World Cup fell during the festive quarter, it tracks with broader trends in viewing behaviour. Broadcast TV viewing dropped by 12 percent YoY last year, according to Ofcom, while broadcaster video-on-demand (BVOD) consumption rose to 10 percent of total broadcaster viewing time.

In line with that shift, ad spend on BVOD is expected to see continued growth during Q4. The report forecasts ad spend on BVOD to climb 20.2 percent YoY, as advertisers aim to reach streaming audiences. That said, BVOD spend accounts for only 18 percent of total TV spend, so the growth of their digital channels may not be enough to pull broadcasters out of the woods.

Brand-y butter

But the report also indicated warm consumer attitudes to Christmas ads, which have debuted on TV screens this week. According to the research, 48 percent of UK adults say seasonal ads help them with gift ideas, while 70 percent of young adults (25-34) cite Christmas ads as “the ultimate festive mood booster.”

“Christmas advertising is an integral part of the festive season,” said Sharon Lloyd Barnes,  Commercial Director, AA. “From offering gift ideas to inspiring holiday cheer, the annual display of brand creativity consistently entertains and warms hearts. One of advertising’s major roles is to help people choose between products and services. Whether it’s an outdoor ad for a local Christmas fair, or a big budget campaign for a high street brand, advertising is there to help people know about the options available to them.”

“Whether you’re a big high street store or a small local business, Christmas advertising is essential to attracting customers, helping to inspire ways people can enjoy the festive season and supporting jobs across the UK,” added Matt Bourn, Communications Director, AA. “The ads we will see this year will be among top contenders for some of the best ads worldwide, going onto win awards and reinforcing the UK’s position as a global hub for advertising, creativity, and storytelling.”

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