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The impact of lockdown 3.0 on the TV market

From March 2020, when COVID initially hurled chaos down onto the country (and the globe), the world of advertising experienced seismic shifts, from which it has not yet fully recovered. As mentioned in a previous ARM article on post-COVID TV launches, traditional media advertising revenue halved year-on-year (YoY) across the height of the first lockdown. TV revenue suffered most heavily with cuts of approximately £500m YoY, but outdoor advertising and cinema in particular all took a big hit.

On the other hand, TV viewing was at its highest. Due to the TV trading model of supply and demand, the decrease in market revenue versus the increase in available TV impacts (pairs of viewing eyeballs) led to a historical anomaly in pricing, with costs per thousand (CPTs) down on average 50% across April and May as a result.

Though a lot of sectors suffered tremendously through this period (such as travel and hospitality) and unfortunately still are. Advertisers that had the right proposition and online offering were able to utilise this opportunity for growth, and secure extremely cost-efficient TV airtime. So, when Boris Johnson announced the country was entering its third lockdown at the beginning of January, those within and across the advertising industry waited with bated breath for the trends to follow those seen in Spring 2020.

But then… not too much changed. Last year, millions of pounds of TV investment were deferred from March and April into later in the year, with overall annual marketing budgets cut drastically for many advertisers. This year, due to the evolution of businesses and consumers across 2020, the country and the market found themselves much more equipped to deal with lockdown 3.0.

As an agency, compared to the first lockdown, we have seen minimal movement in total ad revenue so far this year – and based on market pricing, it seems as though this is reflected across the country. So far, we’re seeing market tolerant TV pricing down 5% in January, and 10% in February. A far cry from the 50% declines we saw last year. Besides, based on market insights, it appears overall market revenue is down 4.7% in January, and 7.3% in February at this stage.

This is primarily driven by a few key sectors that haven’t bounced back post-COVID, such as the travel industry, or bricks and mortar businesses. That said, some TV sales houses seem to be suffering more than others vs. the market. For example, Sky report to be up 4.4% in January vs. the market, and up 0.5% in February, where advertisers are introducing late cash into the market to again take advantage of this pricing.

Turning to TV viewing, thus far in January, kids viewing is down YoY across all age groups as well as 16-34 adults – the latter driven by the lack of Love Island this January. That said, overall, we’re seeing an increase of 5% in adult viewing YoY looking at the 1st to the 12th January, and some strong viewing shifts YoY across the 35+ market.

Within this, it remains to be that the daytime time bands are seeing the biggest increase year-on-year. This is primarily the case for the ABC1 audience group, which historically was more difficult to reach beyond breakfast and peak dayparts, but who are now continuing to work from home.

All Response Media viewpoint

Though TV pricing and viewing has not shifted as drastically as it did in spring last year, there is still a myriad of opportunities for current or new to TV advertisers. The cost to access TV is still reduced compared to last year, and with viewership up overall, the market is still certainly not back to pre-COVID times.

The ability to reach an upscale audience through running a more cost-efficient daytime campaign versus a peak or all-time strategy is still very much possible based on latest viewing insights. If your product or service can operate in these uncertain times, then now may be the time to test or grow TV, and ultimately your business.

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