PricewaterhouseCoopers thinks that up to 30% of UK ad expenditure has moved from tv because of fundamental, irreversible changes representing a structural shift in the TV advertising market. The report lists 5 key reasons for the decline.

PwC partner David Lancefield tells us:

“Some 70% of the recent downturn in the UK TV advertising market can be explained by audience shares and economic conditions, relative to a historic average. We believe the remainder represents a structural shift in the TV advertising market. The concepts of ‘TV’ and ‘advertising’ need reinterpreting in the new era of converged media - both are much broader concepts than ever before.”

The report lists five factors as possible sources of this structural change in the market. In decreasing order of importance, they are:

1. The soaring growth of new media advertising.
2. Contract rights renewal. This reduces ad rates on ITV flagship channel ITV1 in line with a fall in ratings, whilst maintaining advertisers’ volume discounts.
3. Increasing competition between traditional broadcasters’ premium-priced ad rates and cheaper multichannel alternatives.
4. The impact of personal video recorders.
5. Concerns among advertisers about TV ad measurement compared with digital measurement.