Facebook, the technology giant disrupting the traditional media world, is the biggest new spender on television advertising in the United Kingdom.
As a wave of disruption hits publishers and television broadcasters alike, Facebook contributed £10.8 million ($20.9 million) in ad revenue – the most of the 877 new advertisers or those returning to TV after not spending for at least five years.
The social media network launched a number of TV advertisements in the UK in 2015, including this spot called Friend Request.
Along with fellow disruptors Google and Netflix, Facebook helped lift the total UK advertising market above £5 billion for the first time. According to Nielsen data provided to Thinkbox, the marketing body for commercial TV in the UK, Google, Facebook and Netflix spend more than 60 per cent of their marketing budgets on TV advertising.
Total UK television advertising revenue hit £5.27 billion, up 7.4 per cent, in 2015 – the sixth consecutive year of growth, according to Thinkbox. The spend was driven by a 14 per cent increase in ad revenue from online businesses in television to more than £500 million, which is now the second-largest spending category on TV. The £5 billion figure includes linear TV ads, sponsorships, broadcaster video on-demand and product placement.
“Advertisers of all sizes, from global technology companies to local businesses, know this and have voted with their investment,” Thinkbox chief executive Lindsey Clay said.
“Online businesses in particular recognise the impact TV advertising has and have significantly increased their investment recently. This is something we expect to continue in 2016.”
MCN chief sales and marketing officer Mark Frain said the UK television market was benefiting for a number of reasons.
“One of the fundamental reasons, which continues to underpin their growth, is they all work on a similar trading platform to what MCN has incorporated in Landmark and that’s across subscription TV and free-to-air broadcasters in that market. They’re all aligned from a systems perspective,” Mr Frain told Fairfax Media.
“Secondly, within that market, they’ve also got a trading hub that sits in the middle of the industry. In terms of automation and alignment, everything is coming through in similar formats, delivery is automated at a network end. The UK market has been like that for probably over 10 years.”
Mr Frain said the figures from the UK showed television remained an effective medium for advertisers.
“There’s been plenty of alleged discussion about Facebook and YouTube’s ambition to become part of television. I think, by all in large now, if you look at the ways the agencies are trading, they are becoming part of television,” he said.
“But, I think it’s fascinating that they are investing heavily into linear television to drive their businesses.”
Television in Australia is expected to have another lean year in 2016, but the industry’s investment in digital platforms, such as Plus7, 9Now and tenplay are leading advertisers to forecast up to double-digit growth in ad revenue in 2018, according to Starcom Mediavest’s media futures.
“The announcements and the launches that have happened this year, the announcements last year in terms of Seven and Nine’s move into more automation or greater data capabilities through the digital platforms they’re building – there is no doubt that will pay off for the TV sector moving forward,” Mr Frain.
GroupM chief investment officer Sebastian Rennie said while it was hard to draw comparisons with the UK market, the local television industry was looking to put the right infrastructure in place, such as digital streaming platforms, and hoping the ad revenue would follow.
“I don’t think there’s any questions overall about TV being a powerful medium, it’s just going through some structural shifts at moment,” Mr Rennie said.
“Most of the networks in their upfronts [an event where broadcasters showcased their shows and strategy for the coming year to media buyers and advertisers] talked about investing in their digital platforms as a way of future proofing them.”