As appeared in The Guardian on 21 November 2022, read here.

More than two-thirds of the UK’s biggest advertisers intend to cut television spend next year, as the recession fuels a shift to digital media and last-minute bursts of promotion.

A survey of 59 UK advertisers has found that 67% will make the deepest budget cuts to ads on broadcast TV, according to the Incorporated Society of British Advertisers (ISBA) and the media investment analysts Ebiquity.

Overall, nearly 40% of those surveyed said they intended to cut spend in “offline” media including traditional TV, radio, print and outdoor sites such as billboards, on buses and posters sites.

The study, released exclusively to the Guardian, surveyed three of the top 10 and 11 of the top 50 spenders with a combined budget of £1.5bn. While it did not name specific advertisers, the UK’s 10 biggest spenders include the Marmite to Dove maker Unilever, Sky, BT, Tesco, Asda, Virgin Media, L’Oréal, and the Fairy to Pampers maker Procter & Gamble.

Last week, the chancellor, Jeremy Hunt, painted a bleak outlook for the economy over the coming years as he unveiled a tax-heavy autumn statement, saying the UK was already in recession.

“The survey clearly shows the impact of recession on the spending plans of major brands,” said Phil Smith, the director general of ISBA, the body that represents UK’s advertisers. “There’s a general shift towards more flexibility of commitment and a significant swing towards digital delivery in every medium.”

Marketing budgets are traditionally an easy target for cuts when businesses are faced with making significant cost savings, as they can be cut swiftly and have an immediate financial impact. As a result, companies are set to focus on justifying marketing spend, which means a shift to digital media, where targeting and performance can be measured at a more granular level.

A third of companies surveyed said they intended to increase spend on formats such as paid search and social channels, as well as digital formats such as podcasts and music streaming, and digital screens. However, just over 30% acknowledged that campaigns to brand-build will also remain a focus next year.

While traditional TV ad spend is poised to be the biggest loser next year, broadcasters will retain much of the budget cut by attracting money to their digital streaming services. More than half of companies involved in the survey said that they expected to increase spend on services such as ITV’s new streaming service, ITVX, Channel 4’s All 4 and on connect TVs such as Samsung.

A hallmark of marketing strategy will be a shift to short-termism, where campaigns are booked on tight timelines based on immediate need, with bursts of brand marketing.

“Brand owners are sensibly positioning themselves for anticipated recession by building more short term flexibility in their budget planning,” said Nick Waters, the group chief executive at Ebiquity.

“But it is encouraging to see the commitment amongst many advertisers to maintain and even increase brand-building activities. Evidence from past recessions demonstrates that brands which continue to invest for the longer term gain market share and emerge from the downturn faster and stronger.”

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