On this week's episode of The MadTech Podcast, ExchangeWire CEO Rachel Smith and CSO Ciarán O'Kane join head of content John Still to discuss the AA/WARC's revised ad spend forecast, the future of TV as linear declines, and DoubleVerify's acquisition of Scibids.

UK ad spend grows, but inflationary pressures remain

Do the AA/WARC report’s findings give the industry reason for optimism?

The Advertising Association and WARC have revised their prediction for 2023 UK ad spend growth upwards. After a consistent first quarter saw year-over-year ad spend grow 0.1% to £9bn, the latest AA/WARC forecast increased its initial full-year growth estimate from 0.5% to 2.6%.

Online advertising leads the way, with the format accounting for 76.7% of total ad spend and expected to grow further to 77.6% by 2024. Cinema is also expected to do well, with ad spend forecast to grow 20.8% year-over-year thanks to hotly anticipated releases such as Barbie and Oppenheimer. 

This year’s Women’s World Cup and Para Athletics World Championships are also expected to spur growth for TV, radio, DOOH, and sponsorships. Despite the positive figures, Advertising Association CEO Stephen Woodford provided a sober warning that lingering inflation could cause UK ad spend to contract by almost 4.3% this year.

Linear TV in terminal decline?

Is linear TV circling the drain? What do the ITV results and Netflix adjustments say about the state of data-driven tv advertising?

Ofcom have reported a large drop in viewers of linear TV. Weekly audience reach of broadcast TV fell to 79% in 2022 from 83% in 2021. The average time viewers spent watching linear TV each day dropped to 2 hours 38 minutes in 2022.

Elsewhere, ITV has recorded a 24% uplift in digital revenue after investing a further £51m into its streaming platform, ITVX. The broadcaster diverged from other streaming providers (who have cut back on original programming) by pumping £43m into its Studios production unit, which now accounts for more than half of ITV’s total revenue.

Netflix will reduce the cost of advertising on its platform from USD$45-USD$55 (~£35.29-~£43.13) per thousand views to around USD$39-USD$45 (~£30.58 -~£35.29), according to the WSJ. The move comes as the streaming titan readjusts its partnership with Microsoft, whose “revenue guarantee” saw it win the bid to provide Netflix with the technology to support its ad offering just over a year ago.

DoubleVerify buy Scibids in blockbuster deal

What does the deal mean for the industry? Is the power of AI-based solutions starting to grow?

Software titan DoubleVerify has agreed to purchase Scibids in a deal valued at USD$125m (~£97.2m). The acquisition has been described by DoubleVerify CEO Mark Zagorski as “a decisive step in our journey to power superior campaign outcomes”. 

Scibids develops AI to automate and optimise programmatic advertising campaigns, creating bespoke bidding algorithms for their clients. The takeover will combine, “DV’s proprietary data with Scibids’ AI-powered optimisation technology, letting us empower brands with unparalleled insights and control over their advertising performance,” according to Zagorski.