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TV ad rates fall to 15-year lows

The outlook darkened further for the UK advertising market as media pricing and marketing revenues hit record lows in the third quarter.

Research from Billetts Media Monitoring, a division of Ebiquity, found total advertising spending fell 1 per cent year-on-year in the three months to August, with television pricing at its lowest level for 15 years.

 “Buying a television advertisement is now the same price as it was in 1992 [in absolute terms],” said Nick Manning, chief operating officer for Ebiquity and former UK chief executive of OMD, one of the largest media agencies.

The Institute of Practitioners in Advertising’s quarterly Bellwether report also revealed the largest cuts to marketing budgets in the survey’s nine-year history.

Only 13 per cent of companies reported an increase in budgets, with 35 per cent cutting their advertising spending, the fourth consecutive quarter of decline.

ITV, the UK’s largest commercial broadcaster, has experienced a poor September but year-on-year declines in the next two months will be less marked, according to advertising executives.

Ebiquity’s research found that the finance, automotive and government/utilities sectors were making the biggest cuts to advertising spending, with drugs and entertainment companies making the largest increases.

Procter & Gamble, the consumer goods giant, made the largest cut to spending, reducing its advertising budget by £16.1m ($27.8m) between June and August.

Aviva, which is rebranding many of its insurance products, halved spending, a reduction of £10.3m, and Royal Bank of Scotland slashed its budget by £5.9m, partly reflecting the planned sale of its insurance division. The finance sector slimmed marketing spend by 11 per cent overall. Telecommunications groups Vodafone, France Telecom and British Telecom were also among the advertisers making the biggest pullbacks.

Total television advertising revenues fell by 16.8 per cent in September to £286m, but a 10 per cent increase in audiences meant prices actually fell by about a quarter, said Mr Manning.

“We’re looking at the tip of the iceberg here,” he said. “Things have got an awful lot worse since August.” Ebiquity expects TV revenues to fall 6.8 per cent in October, 9.1 per cent in November and 6.4 per cent in December.

Rupert Howell, commercial director of ITV, said he recognised the accuracy of the Ebiquity figures. “Television advertising in the UK is now ridiculously cheap. In the space of a few years we have gone from being the most expensive television market in Europe to being about the cheapest,” he said.

Источник: Financial Times

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