Hey big spender: online businesses spent £639m on TV ads in 2016

New figures from Thinkbox reveal why so many sectors are still spending money to connect with people on the small screen

Hey big spender: online businesses spent £639m on TV ads in 2016

The growth of online streaming services is rapidly outpacing that of traditional TV as more and more people opt to Netflix and chill rather than switch on their TV set. But proclamations of TV’s demise would be premature: it seems that 91.9% of Brits still get their daily dose of visual stimuli the old fashioned way. So given this massive audience, it’s hardly surprising that businesses were willing to splash out a total of £5.27bn last year on TV ads according to Thinkbox, the TV industry’s marketing body.

And online businesses are leading the way. In 2016, companies such as Google, Amazon, Facebook, Just Eat and Netflix were the biggest spenders on TV ads. Online businesses spent 8% more than in 2015 and invested a total of £639m to connect with customers on the small screen. And after investing £34.3m in TV ads – 39% more than the previous year – Amazon was the biggest spender of all its online counterparts.

Meanwhile, the food industry was the second biggest buyer of TV ads in 2016, despite spending 10% less than in 2015. In total, it bought £627m worth of ads last year. The cosmetics and personal care sector was the third biggest spender after forking out £439m – a 3% drop from 2015.

Thanks in large part to a greater investment by online businesses, 2016 was the seventh consecutive year that saw TV advertising revenue grew. And it seems as if 2017 is already poised to become the eighth, with Thinkbox estimating that it will grow by 1.6% this year.

Reviewing the figures, Thinkbox has put forward a few theories as to why businesses are opting to use traditional media to reach their audience when there are plenty of digital options available. For one, the price of TV advertising is 28% cheaper than it was ten years ago. And with its high viewing numbers, TV also enables brands to reach 91.9% of the UK population at one go. “Advertisers invest in TV because it works,” said Lindsey Clay, chief executive of Thinkbox. “TV advertising creates huge effects instantly as well as building and maintaining profitable brands for the long-term. For online brands in particular, which have little or no physical presence, TV’s ability to create emotional connections with large audiences is vital. It helps make them feel less virtual and more real.”

Considering TV’s ability to get brands into so many people’s living rooms, it’s clear why online businesses are investing in traditional media, even if it may seem old-fashioned next to the on-demand nature of online streaming services.

Eric Johansson
Eric Johansson

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