Amazon doubles down on TV advertising

Amazon is now TV’s third-biggest spender, with total TV ad revenue reaching £5.11bn in 2018 thanks to increased investment from online businesses.

Online businesses such as Amazon and Google are increasingly investing their ad pounds into television, helping the sector to “hold firm” despite wider economic challenges.

Last year, Amazon spent 21% more on TV advertising than in 2017. The £60m investment makes the online retail giant TV’s third-biggest spender behind Procter & Gamble (£169m) and Reckitt Benckiser (£79m), up from fifth last year.

Thanks to additional dollars from Google, Just Eat and Trivago, online businesses remain TV’s biggest spending category, spending a total of £760m in 2018, up 7% year on year.

Overall, UK TV ad revenue (including broadcast TV spot and sponsorship, broadcaster VOD, addressable TV, interactive TV advertising, and product placement) totalled £5.11bn in 2018, according to full-year figures provided to TV marketing body Thinkbox by UK commercial broadcasters. That is flat year on year and comes in spite of a challenging economic backdrop and increased investment in performance media.

Food, which is TV’s second biggest spending category, was down 3% to £534m, while cosmetics & personal care was up 1% to £437m. Entertainment & leisure was flat at £380m and finance was up 18% to £378m.

The big increase in finance ad spend is in part due to Capital One and Visa returning to TV after a period of not spending.

“TV is a trusted, high quality environment for brands, and we are seeing signs of money moving back to TV from lower quality online environments that can’t guarantee a safe environment for brands,” says Lindsey Clay, CEO of Thinkbox.

“It is a testament to TV’s continuing power to deliver that a company like Amazon, which understands its customers so well, is using TV to power its success.”

Last year there were 867 new or returning (after a gap of at least five years) advertisers on TV.

While the average cost per thousand for broadcast TV ad views was up 1% year on year to £5.13, TV advertising is now 21% cheaper than a decade ago.

According to BARB, an average broadcast TV campaign in the UK gets 240 million views, with TV advertising responsible for 71% of total ad-generated profit.