The TV industry – should we return to BAU?
As you would have heard on these pages and in the wider media, the COVID crisis has had an unprecedented impact on the TV industry. Firstly, it was the jaw-dropping news of revenue declines across the board: ITV confirmed last week that revenues fell 21% in H1, with Q2 in isolation seeing a 43% drop. Next, it was the news of rising TV ratings, with the nation in lockdown and over 9m jobs being furloughed at the peak of the scheme.
These dual factors, of course, led to TV pricing hitting all-time lows, but a lesser discussed element is that the pandemic also led to the major broadcasters increasing flexibility and driving innovation to encourage advertisers to go or stay on air.
Whilst announcing their financial figures last week, ITV also said that they are seeing signs of a quick recovery, with more advertisers returning to air, particularly in categories that had seen big declines such as travel and high street retail. All the major broadcasters are suggesting that Q4 should see a closer return to normality in terms of investment and ratings, thus advertisers will need to play by the usual rulebook. However, there is concern that this will further affect advertisers’ propensity to return and increase the leakage of TV investment into other channels.
One of the earlier measures introduced by saleshouses was to offer greater flexibility with booking deadlines and removal of late penalty charges. This was particularly helpful for advertisers and agencies facing extreme uncertainty, not just on their advertising budgets but on their ability to provide goods and services. At ARM, we used this opportunity to operate flexibly for our clients, sometimes even booking week-by-week and adjusting spends based on performance. This also enabled new brands to test TV who maybe wouldn’t have done so usually, safe in the knowledge that they could plan and buy more reactively, akin to digital channels.
The requirement to book early is driven by several factors, but probably primarily the fact that broadcasters like to confirm the bulk of their revenues early, along with their often-antiquated booking systems requiring most campaigns to be booked on automatically generated TV schedules. With the need for more income, broadcasters acted flexibly, booking more airtime ‘manually’ and running several ‘auto-gens’ across the month. We would encourage broadcasters to continue to offer this capability, even if it predominantly be used for smaller, performance focused campaigns rather than high profile, peak TV activity. This level of fluidity is important, not just for the recovery period, but also to show that TV can work as nimbly as digital in the battle for budgets.
The COVID crisis also saw nations broadcasters rise to the challenge of driving innovation for advertisers. From C4’s ‘great high street come back’ to Sky’s SME100 support scheme or ITVs ‘People’s Ad break’ – there were some excellent tactical opportunities on offer. The broadcasters responded well in re-shaping their TV schedules, creating new shows and content. ITV led the way in re-packaging older shows and making them available as reasonably priced sponsorship opportunities. Ad clearance body, Clearcast, even got on-board and were looking to work to quicker turnaround times in clearing the plethora of new, COVID-related TV creatives that went on-air.
All Response Media viewpoint
These type of advertising opportunities were unique to TV and illustrate why it remains the lead broadcast channel for viewers and advertisers alike. But we would further encourage this type of continuous innovation, with broadcasters offering proactive, creative and potentially low-cost solutions for advertisers – particularly as competition for budgets becomes tougher.
Overall, the response to COVID-19 has seen the UK TV market at its best – creative, dynamic and effective. However, with the threat of a second wave still present, and the economic fallout now upon us with this week’s recession news, TV needs to remain as agile as ever. With this uncertainty ahead, advertisers will increase focus on reactive, nimble and short-term performance focused channels – often those sitting in the digital-sphere. Therefore, the TV industry should and must remain as agile as it has been since the early days of this crisis in order to retain and increase market share.
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