Sir Michael Grade tries his best to talk up ITV, but he must know his service on the brink of doom. For several years, TV advertising has struggled. Indeed, six months ago I wrote about how television advertising was hard to come by. ITV, in it’s interim report, says that there has been a slight increase in advertising revenues to 2006 levels. What it doesn’t say, of course, is that these are far from the hay-days of TV advertising income levels.
In our house, we don’t watch any TV adverts; we use Sky Plus to record everything, then if it is on commercial TV we just zip through the ads until we get back to the programme. For people under the age of 25 things are even simpler. Most people aged 25 or less in the USA watch TV on their laptop, using software that deletes adverts automatically.
The thing is, people dislike advertising on TV because it interrupts them. The idea from commercial television advertising folk that we love adverts is patent nonsense. If we want to make a cup of tea mid programme, we don’t need an advert, we just press live pause. The only people left watching TV adverts are the very people who the advertisers do not want to reach – those on low incomes who cannot afford systems like Sky Plus.
So what has this all got to do with the Internet? Well, an influential group of analysts is predicting that within the next year in the UK, advertising on the Internet will be higher than on British TV. By 2009, more money will be spent on online adverts than on those which appear on TV, says Group M. At the moment, according to eMarketer, online advertising represents only around half of TV spending. But, the new analysis suggests that by next year the situation could be dramatically different. Indeed, in Sweden online advertising already exceeds TV advertising spend.
This all has significant impacts on TV production. Without the income they are used to programme makers will not get the budgets they want. That will drive viewers to more and more specialist programmes, available via the Internet or subscription channels. The days of the family sitting down to watch the telly are now well and truly over – which means if you are going to by that 42 inch plasma today, make sure it is PC compatible and that you can use something like Windows Media Center; you are going to need it sooner than you think.