LONDON, UK — 2024 is shaping up to be a year of slow growth for TV advertising, even when you factor in the emergence of connected TV advertising.
But Simon Thomas, Global Director, Audiences Research, GroupM, is keeping an eye on whether Amazon Prime’s forthcoming ad-supported tier can tempt buyers with its mix of programming and performance.
Speaking to me at Looking Ahead: TV in Europe 2025, a Beet.TV Leadership Summit, presented by Magnite & Publica, Thomas gazed into the crystal ball for 2024
A Tough Year, but Opportunities Exist
“The worries are the situation in Europe and particularly in the UK where growth is only forecast to be 1.1% – pretty much flatlining and certainly below the level of inflation,” Thomas says.
He doesn’t see much help forthcoming from the transition to streaming TV and more ad-supported offerings.
Thomas’ GroupM recently published its This Year Next Year report, including forecasting global TV growing just 1.1% per year on a compound annual basis to 2028, despite 9.5% growth from connected TV ad spend, driven by a marked drop-off in linear ad sales.
TV Ad Spend Under Pressure In 2024, But Brands Should Make Their Own Choices: Brian Wieser
Could Amazon move the needle?
Despite this, Thomas sees potential in Amazon Prime’s move to convert their existing tier to an ad tier.
“That is interesting. I think we’re talking about, in the UK 13 to 14 million subscribers, albeit a lot of them will be subscribers to the Prime shopping area,” he says.
Amazon in September 2023 said:
“Starting in 2024, Prime Video shows and movies will include limited advertisements in the UK. We aim to have meaningfully fewer ads than linear TV and other streaming TV providers. No action is required for Prime members. We’re not making changes in 2024 to the current price of Prime membership. We will also offer a new ad-free option and will share the price of that option at a later date.”
The roll-out is due in the US, UK, Germany, and Canada in “early 2024,” with France, Italy, Spain, Mexico, and Australia following.
“(It will be a) tough year to pick up discretionary budget, but Amazon Prime has an extremely credible and very strong brand name,” Thomas adds.
“I think is this will be the first time that we can begin to look at the link between television exposure in brand building and also at the bottom of the funnel in terms of triggering performance or some form of reaction, whether that be a purchase or just an expression of interest through their e-commerce practice.”
OMD Chief Investment Officer Kelly Metz also recently signalled excitement about Amazon Prime to Beet.TV.
Ad Demand Is Soft While Streaming Inventory Grows: OMD’s Kelly Metz
The Need for Collaboration and Cooperation
Looking ahead, Thomas believes that collaboration and cooperation will be the watchwords for 2024. “I think for too long we’ve had a television-against-digital battle,” he observes.
He sees broadcasters as having reacted well to the changing media landscape, crediting them for building a balanced proposition across live, catch-up, and on-demand services, as well as for integrating online partnerships.
As for the future of advertising, Thomas predicts a growth in addressability of advertising with dynamic insertion as television becomes digitally delivered rather than a satellite or broadcast medium.
“I think some of the ground experiments may start to take place and that’s an exciting place to be in,” he concludes.
You’re watching “Looking Ahead: TV in Europe 2025,” a Beet.TV Leadership Summit, presented by Magnite & Publica. For more videos from this series, please visit this page.
