'TV neither broken nor breaking', says report

A major new report has rejected claims that the rise of digital channels and on-demand services has left the television advertising market “fundamentally broken”, arguing that there is still no viable alternative for a company looking to launch a new brand, product or service.

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The annual study of 4,000 consumers by Deloitte and GFK found more than half (57%) ranked television advertisements as having the greatest impact on purchasing decisions of any media, down only slightly on the 58% and 56% that rated the medium top in 2011 and 2010.

Newspaper ads came in second with 15%, flat on 2011 but down steeply on the 30% registered in 2010.

Elsewhere, just 1% rated online banner ads within smartphone apps as having most impact, down from 8% in 2011. Four per cent chose search engine ads or sponsored links, flat on 2010 and 2011.

Paul Lee, director of technology, media and telecommunications research at Deloitte, says: “The UK’s willingness to consume adverts in such quantities and advertisers’ continued eagerness to invest billions in TV advertising perplexes many commentators. Some regard the traditional TV advertising model, based on the 30-second spot, as fundamentally broken.

“Deloitte’s view, based on our research, is that the traditional TV advertising model, is neither broken nor breaking. It has, for the fourth year running, maintained its ranking as the advertising medium with the greatest impact and by a clear margin.

“Advertising is multi-faceted and every campaign will have a different objective. At present there is no equivalent for companies to promote a new brand, product or service quickly and reach consumers across the UK.”

Despite the seemingly robust present state of the market, the report does strike a note of caution over the future of the television advertising market. The number of young people (19-24) ranking television advertising the highest fell to 56% this year, from 69% in 2011.

Lee adds continued uncertainty over the state of the economy means finance directors may lean to cheaper alternatives in the short term.

“In challenging economic times, companies may focus more on the tactical, manifested by a skew to promotions-based adverts and they are not as palatable in large doses,” he says.

Spend on TV advertising fell 0.7% in the first quarter, according to Advertising Association/WARC data. However, it is expected to regain some ground across the year, with 0.3% growth forecast.

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