The UK and US TV Ad Markets: Comparing Stars and Stripes

A common feature of the UK TV advertising market is that, when attempting to forecast future trends on our shores, we look across the Atlantic for answers. However, there are various reasons why this is a mistaken pursuit. We look at three fundamental differences in the anatomy of each industry that makes the comparison a misleading one.

A Question of Time

First, let’s talk size. The UK is a relatively small collection of islands that all sit within one single time zone. Yet despite this, the British Isles accommodate over 65 million inhabitants, making it one of the most densely populated countries in the world.

What this means from a TV advertising perspective is that national televised moments are part and parcel of the media environment; on a weekly basis, episodes of soaps, reality TV shows and general entertainment monsters such as The X Factor set millions of tongues wagging both online and offline. Brands not only gain national exposure via TV spots at decade-low costs, but also benefit from the social conversations instigated through the medium, with the 45 TV ads each UK adult sees a day generating 51% of all marketing generated conversation.

The sheer size of the US, on the other hand, means that you could live in one of nine time zones, a by-product of which is a staggered domestic schedule that renders national televised events – other than live sport – an impossibility. As a result of the lack of countrywide coverage opportunities, advertising on TV during live broadcasts of the Super Bowl will cost a company millions of US dollars –  a prohibitive price for all but the biggest of brands.

One further issue is that reality TV shows and general entertainment are subject to rolling release schedules, thus fragmenting regional audiences depending on the time zone they reside in. Consequently, such shows generate a far smaller level of social interaction; there is little of the collective viewing experience to trigger the social conversation experienced in the UK, with even live voting and results shows beyond American TV producers. 

Quality, Not Quantity

Another key divergence in how the UK and US TV ad markets operate is in the quality of ads and the number of ads aired. Over in the US, the live TV viewing experience is notorious for the number of questionably produced, often regionally focused TV advertisements that litter the television schedule. In 2015 an hour of programming included an average of over 15-minutes of TV advertising throughout the day, with ad breaks seemingly occurring every 5-minutes to lower the quality of the viewing experience and impel large sections of the audience to turn to VOD as a means of avoiding such disruption.

For this reason, ad skipping is generally at a much higher level in the US, with the growing trend of ‘cord cutting’ – especially amongst millenials – seeing VOD and online video viewing (especially Netflix, which has become the main viewing platform for many households with a portfolio of shows and films far superior to what's available in the UK) replacing scheduled TV as the favoured means of watching content. It’s little wonder we’re constantly bombarded with new proclamations of the ‘programmatic revolution’ from the other side of the pond.

The UK, on the other hand, adheres to a much stricter set of regulations around the volume and placement of TV ads, with Public Service Broadcasters limited to 7-minutes per hour and all other commercial channels 9-minutes during off peak. For peak, the limit is 12-minutes for all channels. A taste for higher levels of production quality – now accessible to businesses at an unprecedented level of affordability – also contribute to what is generally a lower desire to migrate away from the live TV schedule. In fact, 61.6% of all video content viewed per average UK individual every day is live TV, with the next largest source of content playback TV, which accounts for 11.4% of viewing.

For younger viewers, live TV remains an enduring staple of daily video consumption, accounting for 43.5% of all video viewed, with the average 16-24 year-old watching 30 TV ads a day. YouTube is the next popular source, at 10.3%. Additionally, the BBC plays a particularly important role in controlling the amount of TV advertising spots aired, with commercial broadcasters mindful of turning viewers away from their respective schedules as a result of over-saturation. 

Free Rein to Harness TV’s Power.

The final key difference between UK and US TV advertising is the former’s superior free-to-air offering. Whilst on both sides of the Atlantic there are opportunities for advertisers to reach smaller, niche audiences with targeted TV strategies through pay-TV platforms, in the UK there is a far greater selection of quality TV channels via the likes of Freeview and Freesat. This feature of the market grants viewers greater channel choice, and the advertiser greater targeting capabilities at low TV advertising costs.

In the Us, the free-to-air infrastructure simply is not powerful enough to cover the more sparsely distributed population, with only major cities being in a position to receive broadcast quality services. Due to this, the availability of such platforms depends on where you are; for many viewers, pay-TV subscriptions are the only feasible means of accessing a wider variety of channels without cutting the cord.

Conclusion

The UK and US TV markets share various similarities: TV remains a favourite pastime on both sides of the Atlantic; dual-screen viewing has significantly increased response levels, distinguishing the small screen as the new point-of-sale medium; and both nations are famed for producing great TV content that attracts enthusiastic audiences.

However, there also exist many differences, rendering attempts to use the American TV advertising industry as a harbinger of what the future holds in Britain a misguided venture. Whilst it would be foolish to employ a blinkered approach in how we view our national market, ultimately, the UK is unique in its size, dense population, quality of TV production values and its appetite for engaging with brands that gain our trust. We can be a demanding audience, us Brits, but the rewards for ambitious businesses of any size who invest time and energy into TV can be huge.