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Bricks and mortar retail is undergoing a significant accelerated contraction with 17,000 physical outlets closed during 2022 in the UK alone. This figure is predicted to grow during 2023 driven by several concurrent factors: continued growth in online consumer purchasing, punitive operational costs for retail stores and broader sector competition. Many Retailers and Brands alike have been over dependent on their high street presence to drive their businesses forward for too long. However, this material sector wide change also signifies a growing commercial opportunity to expand their own online sales operations, by adopting a profitable performance-based business model in the future. Retailers can capitalise on this by concentrating more on bolstering their web presence to reflect the consumer profile of purchasing habits - 26% of all UK retail sales are now being made online - and to drive a more consistent ‘lifetime value’ business model. Ongoing direct contact and promotion with their customer base will build online business and greatly reduce future operational costs. Brands who focus on building online business can enjoy cashflow, margin and the longer-term benefits of dealing directly with their end-customer. They can also loosen dependence on high street retailers, who have been known to dictate consumer pricing and demand increasingly higher margins than can be generated from their own online direct sales operation. In addition to the high street becoming increasingly less significant the growth of Amazon, with 90% of UK shoppers using the platform and over 13million using the Prime service, has also dramatically altered the overall UK retail landscape. Some of SmartResponse’s clients have seen that this significant shift in purchasing behaviour has also led to consumers often buying from Amazon as a result of seeing TV advertising campaigns, even if the platform has not been specifically mentioned as a listing outlet in the TV commercial itself. In fact, the online direct sales achieved have in some instances been greater via Amazon than on their own advertised dedicated websites. Whilst clearly a percentage of Amazon sales generated from a DRTV advertising campaign will be replacing existing online sales there can also be no doubt that a proportion are also incremental too as the total UK digital retail economy continues to mature both in terms of scale and consumer preferred buying behaviour. Over the festive period when footfall was disappointing and sales were reported down in many high street outlets, those clients who continued to be on air with DRTV advertising campaigns not only generated significant increases in profitable direct sales via their own and other digital platforms, but they can also now nurture lifetime value with their growing online customer base. During challenging economic times those Retailers and Brands that continue to adapt to the rapidly accelerating changing environment will prosper especially if their marketing campaigns are augmented with effective and attributable DRTV. Those whose presence remains too dependent only on the high street will inevitably find commercial life increasingly difficult in 2023.

The constant barrage of bad news from both government and all areas of the media leads to the unwelcome conclusion for UK based companies that a deep and potentially lengthy economic recession has already started. Many high street retailers exhibited extreme caution this year in wholesale stock ordering for the key final ‘Golden Quarter’. Added to this Amazon reported a quarterly loss in October (the first since 2015) coupled with several recent significant high-profile casualties in Eve Sleep and Made.com. Marketing budgets for brand TV advertising are being materially cut in the future as companies brace themselves for a potentially bumpy road into 2023, and beyond. The future, however, is not dark for all marketers as a recessionary environment has typically been kind to those brands, products and services that rely on direct response marketing as a means to drive their profitable sales and market share. The consumer during tough economic times typically cuts back on discretionary spending for entertainment and spends significantly more time watching TV at home. This change in behaviour coupled with brands cutting back on their marketing spends in TV then drives the cost of TV airtime down for advertisers. The increase in online purchasing behaviour and engagement – which grew dramatically during the pandemic years of 2020-2021 – will create a perfect storm and welcome opportunity for direct response TV (DRTV) advertisers in the coming months in the UK. Previous recessions, including after the global financial crash in 2008, teaches those in the DRTV advertising industry two pertinent commercial lessons: 1. There is a significant opportunity for those brands who are willing to embrace direct marketing and take commercial advantage of the soft TV airtime market during recessions. 2. DRTV advertisers due to the inherent supply/demand dynamics of TV airtime pricing and change in consumer behaviour prosper during challenging macroeconomic times. With the assistance of lower media costs, DRTV planning/buying and campaign optimisation the future can indeed be bright…

This week Meta Platforms, the owner of Facebook, for the first time in its quarterly financial reporting history found itself in very unknown territory – passing on bad news to the markets. This update resulted in the company share price plummeting by 26.4% in one day leaving Mark Zuckerberg struggling by on a reduced $90billion estimated personal net worth. The primary drivers behind this extreme nervousness from Investors is two-fold – reduced daily users on the Facebook platform that are clearly now being attracted to younger and more desirable competing social media platforms, including TikTok, and also a significant drop in advertising revenue. Since the introduction of the App Tracking Transparency Policy by Apple in April 2021 the effectiveness of Facebook advertising has been materially reduced. Many consumers opted for privacy in the iOS Apple update last year, therefore greatly reducing the amount of information that Facebook can collect on their users for targeting purposes. This was previously their standout strength as a media owner. This has made Facebook a much blunter advertising proposition for many companies and brands that primarily measure success by the hard financial metric of Return on Advertising Spend (ROAS). By way of comparison, since the onset of the pandemic in March 2020 direct response television (DRTV) advertising has experienced a significant renaissance with markedly increased viewing audiences especially during daytime, lower commensurate media rates and a growing consumer propensity for online shopping for products and services. Many established and new DRTV advertisers are now seeing record profitable ROAS from their broadcast activities with some recent campaigns in Quarter Four 2021 producing a ROAS of over £10 sales for every £1 invested on DRTV airtime. Prior to the pandemic linear TV was, in some circles, being written off as yesterday’s marketing. A huge amount of brand investment was migrating to digital media buying activity and in particular paid for social media. However, this marked shift in 2021 looks set to be here for the long term, and many brands are now looking to the potential of DRTV advertising to grow their businesses profitably whilst concurrently driving mass awareness. Times are certainly changing in this new privacy restricted dawn.

Facebook has enjoyed incredible commercial success with their advertising services allowing brands to target their audiences precisely, cost effectively and in volume. Historically, their unique algorithms have generated some of the best returns on marketing investment for many UK companies. In the past weeks and months, however, there has been a very significant decline in performance for a large percentage of Facebook UK advertisers, driven primarily by the introduction of the recent Apple iOS 14 upgrade. In short, if a user opts into this new Apple software upgrade on their phone then this effectively prevents Facebook from tracking the user’s behaviour, therefore undermining the efficacy of the Facebook pixel that is placed and operational on advertisers’ websites. Whilst Apple may argue this move is to protect consumer privacy, their new iOS system undermines all Facebook reporting, conversion tracking, lookalike generation and dynamic remarketing – the platform’s key differentiating strengths – and ultimately advertiser performance. As 80% of users access Facebook via their phone, this development from Apple is causing a great deal of commercial harm. Whilst a proportion of all Facebook users may opt in to being tracked and sharing all their personal information with Facebook, looking ahead there can be no doubt that recent well publicised controversies around their poor privacy policies and data leaks cannot be helping the take up of this option. In the UK many advertisers in recent years have opted to launch and scale their brands on the Facebook platform, and have to date achieved great success prior to this aggressive move from Apple. Business confidence has already taken a major hit in the last quarter with some industry observers predicting 60% fewer website sales on a like for like basis from Facebook advertising investment, due to the now diminished key personalisation of their media delivery. The good news is that, in the ever-adapting pandemic media landscape, TV remains very good media value. Since the initial national lockdown in March 2020, TV has grown in terms of audience levels and continues to deliver excellent cost per thousands and return on investment for clients. Facebook has been a great direct marketing medium for brands and advertisers utilising audio visual content in recent years, but this severe dip does not look like it is going to be resolved in the near-term. Many marketers are now looking to move their valuable media pound into advertising that continues to offer excellent returns on their investment. Seeing this is an opportunity to take their learnings and invaluable experience in direct selling on this online platform, and instead invest in the established medium of Direct Response TV advertising to drive their businesses forward in 2021 and beyond.

Systemic societal changes brought on by the pandemic have caused growth in TV viewing and buoyed the DRTV advertising industry in the UK. At the outset of the global pandemic in March 2020 there was certainly fear in the UK TV advertising markets about what the future would hold in terms of both audiences and respective revenues. Whist many major TV advertisers pulled out of the market almost overnight in Quarter Two 2020, as the first national lockdown was ordered by Government, an unexpected surge in home TV viewing occurred. This was driven by the vast majority of people now working from home as staff deserted their offices, coupled with mass news consumption. These concurrent macro market influences drove down the costs of TV airtime to levels unseen since post the dot.com crash in 2001. This has meant that many advertisers who operate their own D2C business, particularly those in the DRTV sector that traditionally broadcast during daytime, have flourished in the past year. Thinkbox, the marketing body for commercial TV, have recently published their audience viewing summary for 2020 that shows traditional linear TV remains in rude health with increases in viewing of both live TV and Video on Demand (VoD). This is despite the fierce competition from the key players in the Subscription on Video Demand (SVoD) field; Netflix, Amazon Prime and Disney+, amongst a myriad of other digital platforms vying for viewer’s attention. The headline news is that live TV and VoD have both seen significant increase in viewing against both the 16-34 year old demographic, and also ‘all adults’ in the last year. In terms of viewing, 92% of all video advertising was consumed on both live TV and VoD. Some major broadcasters are reporting year on year audience uplifts of 30% during the daytime daypart, and DRTV advertisers have on the whole enjoyed a bumper start to 2021. Looking ahead, the Government continues to grapple with the fine balance of opening up the UK’s economy, including the extension of the furlough scheme to September, and managing the mass vaccination programme and the potential existential threat of a third surge of COVID. This material societal uncertainty has continued to drive a sustained systemic change of culture of working from home, and TV audiences are predicted to stay at enhanced levels for the foreseeable future. In many recent surveys, of both employers and employees, up to 50% of workers will be unlikely to returning to the office in the foreseeable future. This migration and fundamental change in daily working habits will continue to drive incremental audience ratings of television in the months ahead, but in particular during the daytime daypart. Whilst the COVID crisis of the last 12 months has had a devastating impact on the economy and the vast majority of the entertainment industries, it has also strengthened and grown traditional TV viewing as well as growing streaming platforms in the UK – so the future is starting to look brighter for TV advertisers and particularly those in the DRTV sector.

As Jeff Bezos stepped down this month as CEO of Amazon in many ways his ubiquitous brand has reshaped the retail landscape forever, customer expectations have been raised beyond all recognition and become the standard by which the sector as a whole now is judged. It is easy to be distracted by the monopolistic sales figures that Amazon now enjoys with over 50% of all online sales in the US being transacted through their platform and over 125million Amazon Prime members in that country alone. The UK is not far behind with one in three online sales being handled by Amazon. This truly global business, which now delivers over 10 billion items per annum and employs 840,000 staff, has been built on simple principles; always putting the customer first, innovation and being patient. From starting as a standalone online book retailer Amazon has achieved its goal of becoming a mass market retailer that offers an unrivalled range by category backed with highly competitive pricing and unmatched customer service and efficient delivery. In addition, as a brand Amazon has successfully managed to extend into data services, entertainment production, audio devices and most recently ventures on the traditional high street retail with the purchase of Whole Foods and now opening its own fully branded stores. At the very core of its commercial proposition Amazon has been a combination of burning ambition and relentless consumer focus. Its ability to enter new markets with both efficiency and precision and to take a long-term view with both the public equity markets and investors – it took 14 years for it to book a net profit – place it now in an unassailable dominant market position. For traditional high street brands Amazon was undoubtedly underestimated in the first instance at its inception in 1994, when the internet was in its infancy, and has increasingly grown into a very difficult competitor to cope with and left many traditional retail brands struggling or buried in its wake. Brands also quickly realised it was virtually impossible not to list their products on Amazon and maintain market share and, either as wholesale customers or adopting their hugely successful Fulfilment by Amazon model, migrated en mass to their platform – further undermining the bricks and mortar retail business model. For those retailers willing to adapt to the market presence of Amazon they’ve been a key motivating factor in upping their multichannel offering and customer service. It has been encouraging to see in recent weeks several UK retail brands including Dixons, Dunelm and JD Sports delivering excellent financial results for 2020 despite the epoch changing challenges presented by COVID, and the continued growth of UK pureplay retailers including Boohoo and ASOS who are experiencing exceptional growth and profitability. No doubt all retailers now measure their own service levels and execution against that of the ever-evolving Amazon. As Jeff Bezos takes up his Chairmanship and focusses on the myriad of his other interests including space travel and publishing, both customers and the retail sector alike are respectful for the pioneering, exacting and constantly disrupting spirit of Amazon that has created a standard that all retailers now need to aspire to in order to succeed. As the exiting CEO described in his letter to Amazon shareholders in 2019: “We will make bold rather than timid investment decisions where we see a sufficient probability of gaining market leadership advantages. Some of these investments will pay off, others will not, and we will have learned another valuable lesson in either case.” The unrelenting process of growth for Amazon will undoubtedly continue after the founding CEO now steps upstairs…

During the year 2020 there have already been many fundamental changes to the UK retail landscape with consumers radically changing their buying behaviour from March-June during the first phase of the Covid-19 pandemic crisis. As Government enforced restrictions limited choice on the high street, many customers have reverted to buying their products and services from direct to consumer retailers and brands. With the latest announcement from Government regarding the lockdown from November 4th-December 2nd the traditional bricks and mortar retail sector, which in recent months in the UK has shown some shoots of recovery, will again greatly suffer in the coming four weeks which typically are some of the most lucrative in the annual calendar in the run up to Christmas during the so called Golden Quarter. For many traditional retailers who have embraced Black Friday in late November they will now also will miss out on this pre-Christmas sales phenomenon entirely in 2020. In recent months we have already seen many household name retail brands submit to the financial pressure brought on by the global pandemic entering administration. Coupled with wider macro-economic pressures of increased unemployment and low commensurate forecast GDP growth in 2021 we can only anticipate further casualties on the high street next year. It is currently very unclear whether the latest lockdown will in fact cease on December 2nd according to some senior Government Ministers who openly question the ever-optimistic Prime Minister’s assertions. More worryingly there does not appear to be a clear policy looking ahead that can deal with Covid-19 on a mid to long term basis without endlessly reverting back to a cycle of opening society for limited periods with significant restrictions followed by subsequent stringent lockdowns until a vaccine is both proven and widely circulated nationwide. This level of uncertainty spells extreme pressure for multichannel retailers especially those who are over exposed to high street locations and retail space, but who’s direct to consumer marketing policy and operational infrastructure is still not aligned to the requirements and expectations of the ‘new normal’ retail customer. Since March 2020 direct to consumer brands and retailers have in many cases experienced unanticipated expansion – Amazon have recorded 37% growth in sales growth in the third quarter alone – but many brands and retailers have also faced unexpected operational challenges presented by this new growth opportunity that has occurred so suddenly and are struggling to cope. Looking ahead into the highly unpredictable year of 2021 it would appear that the online pureplay retail businesses will expand yet further in terms of the overall percentage of the retail market. During the coming decade the tipping point of 50% of all retail purchases being online will inevitably become a reality much quicker than any industry forecaster had previously predicted. Traditional brands and retailers can certainly take advantage of this rapidly changing commercial environment in terms of selling considerably more of their merchandise directly via online and DRTV advertising, but it is also inevitable that those who have been slower in recent years to adopt a strong direct to consumer marketing approach prior to the pandemic will need to act fast and invest in D2C to be able to survive and thrive in the coming period.

Every day the news from the multichannel retail sector points to a very stark dichotomy in fortunes – on the one hand a growing litany of company administrations or downsizing of household name high street retail brands, and on the other an explosion of exponential growth in the pureplay online sector with Amazon and Ocado reporting record growth of sales since March 2020. Prior to the onset of the Covid-19 pandemic many high street retailers were already struggling with unrelenting changes in consumer buying behaviour as online sales continued to grow unabated year on year. The recent global crisis, however, has turbo charged the growth in online sales with the overall percentage having increased from 21% to over 34% of all retail sales (source: Office of National Statistics) – a staggering increase of 50% in real terms over three months. As non-essential retailers opened on the high street again under social distanced restrictions, an initial spike in demand has fallen back to an average of circa 40% year on year comparison in many cases. Whilst Government has decreased the financial burden in the short and medium term via assistance with both rates suspension and the furlough scheme for employees, the fiscal reality of ‘new normal’ trading conditions will return during the final quarter of 2020 as businesses are gradually weaned off this vital State economic support. Whilst the pandemic clearly represents the biggest existential threat to high street retailers for those that have invested in a strong online multichannel presence, this has also been an opportunity for them to further migrate their businesses to digital. Many audiences, especially those in the mature sector, have been virtually forced to adopt buying online since March 2020 and are now likely to remain digital customers; further changing the demographics of this audience. So what does the future hold for high street retail in the short to mid-term? Until a vaccine for Covid-19 has been established and widely distributed in the UK footfall and retail sales will inevitably be greatly diminished for the foreseeable future, but it is unlikely that operational fixed costs can be commensurately trimmed to manage this inevitable downside in revenue. Whilst the current Government is proving to be largely supportive with its fiscal policies, there is a limit to how far this can be realistically stretched and therefore we can only anticipate some further casualties especially in Quarter Four and this to be accelerated into the first six months of 2021 if the key Christmas trading period fails to deliver. As Retailers grapple with the ‘new normal’ business model this will also have a massive knock on effect for many brands and product owners who have been very dependent on them for the majority of their sales in the UK. Many Brands prior to the Covid-19 crisis have embraced the importance of the growth of their own direct to consumer digital activities and during the last quarter have reaped the benefit of their investment as consumers have exponentially migrated online. As 2020 progresses the question for both Retailers and Brands is not whether online sales will continue to grow, but how can they manage this radically new commercial landscape and all its inherent challenges.

In the last six months of 2019 some of the biggest technology and entertainment global brands have entered the already highly competitive Subscription Video on Demand (SVoD) UK online broadcast sector previously dominated by NetFlix and Amazon. Whilst SVoD platforms provide relatively low-cost monthly subscriptions to grow their audience base they are also required to produce new high-quality viewing content to achieve differentiation and customer growth – this double-edged sword leads to questions regarding the long-term financial viability of these media operations in the 2020s. The new SVoD entrants include AppleTV+, Disney+ and most recently the joint venture between the BBC and ITV – BritBox.  There are yet more major companies coming into the UK SVoD marketplace in 2020, including WarnerMedia, that will increase intense competition in this online broadcast medium distributed by broadband infrastructure. To date SVoD media operations are dependent almost purely on monthly subscription fees, as opposed to above the line advertising revenues which traditional broadcasters, including ITV and Channel Four, have been reliant on to drive their commercial existence. Content creation, and most importantly new exclusive content creation by platform, defines the lines drawn in the fundamental battleground for this new SVoD dawn in broadcasting.  The year on year growth in this relatively new sector in the UK has been formidable with NetFlix now boasting penetration of 11.8million UK homes whilst Amazon Prime has reached 6.4million.  The commensurate costs to compete in this most aggressive of media marketplaces in terms of new content creation is turning into a media arms race and will inevitably test the nerve and finances of even the biggest global corporations. In terms of the end consumer/viewer the monthly cost for SVoD in the UK remains comparatively low at circa £5.99-£8.99 versus Sky Digital and Virgin Media packages.  The successful SVoD business model to gain profitable traction has to be both very competitively priced, and also attract mass scale and penetration to ultimately achieve financial viability. The conundrum faced, however, is that mass scale by market can only be delivered by producing a constant flow of new and expensive content to attract, grow and critically retain new subscribers.  It is estimated that $250billion will have been invested in 2019 on new content in this his burgeoning SVoD industry, and this is investment is forecast to grow to between $250-$300billion in 2020. This new commercial model is testing the mettle or the biggest of commercial monoliths to gain hegemony of the SVoD sector – by way of example Disney+ forecasts their breakeven model being reached by 2024 when a range of 60-90milllion individual monthly subscribers has been attained.  This will be a long game driven by financial muscle and competitive attrition. SVoD companies, due to their inherent scale and global coverage, have the ability to amortise their new content budgetary investments across key international markets, as long as their subscriptions grow as they are forecasting them to.  With more major entrants into the market fighting for subscriptions though, will this become a fight to the bottom and will advertising ultimately have to be introduced on these platforms in the short term to make the SVoD model financially viable and sustainable? This global reach and new content distribution by SVoD companies is in turn creating major challenges for local traditional broadcasters who are dwarfed by this level of content investment.  This challenge in the UK is exacerbated by deficits in traditional broadcast viewing audiences, driven by structural changes in generational broadcasting consumption reducing both their advertising revenues and commensurate ratings year on year. This in turn is causing an unprecedented impact on the linear TV advertising model, and a real problem for traditional broadcasters looking ahead into the new decade.  This does, however, open up opportunities for less conventional television advertising in longer Direct Response formats, which bring incremental revenue for broadcasters and interesting new opportunities for advertisers willing to test this medium. The fight for viewing audiences of the UK, whether from free to air platforms via SVoD or satellite/cable, is set to become even fiercer as we enter the 2020s.  It is virtually impossible to predict who will ultimately dominate the SVoD UK sector, but they will certainly require bravery, very deep pockets and a long-term patient view.

Nike announced this week that they will be withdrawing from their two-year pilot trial with Amazon to take full control of their own D2C selling strategy.  They will also simultaneously be placing some of their wholesale agreements with third party retailers ‘under review’ as they seek to take greater control of their global product distribution. On the face of it this news would appear to counter to the logic of the new multichannel retail world with Amazon now accounting for 37.7% of all online sales in the US market, and 51.6% in the UK.  The logic followed that Amazon was too big to commercially ignore and brands could not realistically prosper without being listed on this key global online retail platform. Whilst Amazon offers both massive scale and audience reach in virtually every market they operate in, there is clearly a growing concern amongst established brands that ultimately these clear benefits no longer outweigh the longer-term threat to their business model. As D2C sales become increasingly important, as the online market continually grows and generational buying habits migrate towards direct buying, Nike have signalled that they would rather now standalone and dictate their own pricing and service business model than be listed on Amazon. Amazon clearly offers volume sales for almost any product brand but there are two material trading caveats that are becoming increasingly troubling in the changing multichannel retail world: Amazon set their retail pricing dynamically using their own algorithm which often undercuts both direct and indirect competition, and Amazon own all the customer data for all transactions on their platform for the purposes of remarketing.  As D2C online selling is forecast to become 30% of all retail sales by 2030 these trading factors are now becoming under increasing scrutiny and concern. Nike are pursuing an aligned global strategy looking ahead, by growing both their own branded store presence and by taking full control of their D2C marketing.  They are setting an industry precedent that may precipitate a fundamental change of thinking about how other brands deal with Amazon in the decade ahead. Looking into the decade of the 2020’s the key fundamental question for brands is how with they deal with the growing dominance of Amazon and its inherent trading implications.  Ultimately the choice is binary – adopt a standalone D2C strategy as Nike have, to enable control of their retail pricing, customer service and profits, or continue to trade with Amazon, thus sacrificing control but maintaining global reach and scale through this goliath online department store.

In the 2019 multichannel retail world in the UK – the world’s most dominant e-commerce market by overall percentage of all retail sales – almost 20% of all products and services are now purchased online (source: Office for National Statistics 2019). Multichannel retail industry sector forecasters are predicting that the ratio of online sales could, within the next decade, reach as high as 30% of the entire UK retail market as the role of the High Street outlet continues to evolve and adapt in accordance with this platform migration in consumer buying behaviour. For Retailers and Brands who have relied on their retail wholesale customers to sell the lion share of their products and services historically, and have not managed to establish and scale their direct to consumer sales strategy to date, this challenge will become ever greater as overall online sales continue to grow.  In short 20% of their overall sales should be direct to consumer in 2019 in order for them to keep up to pace with the rapidly changing UK retail landscape. The need to align sales and marketing ambitions to match the multichannel retail environment will become exponentially greater as they strive to meet the current demands of the multichannel based consumer.  For many companies who, for a myriad of reasons, are behind the curve in terms of the ratio of their direct to consumer sales versus the overall retail market this challenge will become increasingly harder to manage looking ahead. For Retailers to face this fundamental multichannel challenge ultimately means tackling the inherent issue of retaining too much retail physical space versus declining retail sales per square foot.  For Brands this requires sensitive communication to Retail wholesale customers that they now need to explicitly develop their own direct selling operations to face this commercial challenge and prosper looking ahead too. These fundamental operational changes clearly are both challenging to implement and will cause material disruption to staff, operations and commercial relationships in the multichannel retail sector – but will ultimately define commercial survival in the 2020’s. It is worth noting, however, that the published figures of circa 20% online of all UK retail sales includes pureplay online monolith of Amazon.co.uk, who sell virtually 100% of their merchandise and services via the internet and now account for over 51% of all online sales in the UK in 2019. On the flip side, as part of their recently announced multichannel UK expansion plans Amazon are now branching into Bricks and Mortar retailing, growing their presence in the more traditional format on the High Street in the UK selling both books and a wider merchandise offering including grocery.  Multichannel appears to be going full circle for those operators whose consumer offering is connected and ‘360 degrees’ in terms of its consumer touchpoint implementation. Multichannel thinking applies more than ever to Retailers and Brands who want to survive and prosper as we enter the next decade.  In these times of uncertainty in the multichannel retail world with bankruptcies continuing for household name brands on the High Street on a virtual weekly basis – Mothercare being the latest established retailer to fall into administration announced today – it would appear that the previous way of doing business with the new consumer needs to be, in many cases, radically addressed otherwise other significant casualties are inevitable in the decade ahead.

The UK TV advertising market has been long established as the most stringent worldwide in relation to independent regulation, with all TV adverts being required to be pre-approved via Clearcast (previously known as the BACC) prior to airing on TV channels across the UK. This unique regulatory body, funded by the key broadcast media owners, ensures that all UK advertisers adhere to the ASA BCAP Code, whereby all claims in the advert are both independently proven and substantiated. This thorough methodology instigated by Clearcast is employed by Media Owners to create a balanced ‘playing field’ for all marketers in the UK who wish to employ broadcast TV, and furthermore to help to protect the end-consumer against false claims for TV advertised products and services. In recent years, as social media platforms have become ubiquitous in daily consumer media consumption, an extraordinary level of new video advertising content can be produced and published instantaneously by both individuals and companies alike. This new marketing era has created a huge challenge for both Regulators and Media Owners alike in terms of regulation in the UK. The consumer also has growing concerns too – the MEDIA Nations 2019 Report published by OFCOM in August reported 45% of all adults think that all types of online video content should now be regulated. Regulation of social media video advertising in many ways is based on the same premise as many foreign territories, including the United States, whereby advertisers are able to air copy on TV on the assumption that they have adhered to the published regulatory guidelines, as opposed to the pre-clearance process in the UK. If advertisers are found ‘after the fact’ to have abused the given guidelines, then they often face post broadcast reprimand by Regulators – in the most severe case criminal prosecution and ultimately exclusion. This absence of pre-clearing video advertising copy on social media platforms can be argued to give advertisers a greater creative license to market their wares to a global and continually growing audience. However, this lack of regulatory control has led to recent global negative publicity for the social media platforms, notably Facebook, and enabled these media owners to become unintended promotional vehicles for highly undesirable content; creating considerable political and social unease globally. Whilst the sheer volume of new content produced on a second by second basis is virtually impossible to adequately police satisfactorily, new investment by Facebook/Instagram in terms of increased human monitoring and enhanced technology may help to improve the standards applied to video advertising published online looking ahead. Confidence badly needs to be re-established in these social media platforms, but without regulatory strength this is going to be a difficult goal to achieve and legitimate advertisers will ultimately suffer under the weight of mistrust. That said we would also question whether the UK regulatory bodies are taking this a ‘step too far’ for TV advertisers? The rulings this week by the ASA against PHILADELPHIA and VOLKSWAGEN for their recent TV advertising for what they deem to be ‘offensive gender stereotyping’ content will be very costly to these brands. We therefore have to question where will the future lines be drawn? Are these TV adverts really damaging? What certainly will be damaging is if over-inflated regulation makes it less and less appealing for advertisers to utilise broadcast media looking ahead. Whilst the UK regulation of TV can sometimes be perceived as too challenging by some advertisers and marketers as it stands the protection it gives to consumers is ultimately a price worth paying to ensure the advertising industry maintains its credibility for the viewing audience. This unique regulatory standard in the UK should be welcomed by all advertisers alike regardless of the platform they advertise on to create a genuine level ‘playing field’ for all, so long as the Regulators ensure their administration of all the broadcast media landscape is both fair and reasonable. For more information contact Pete Mills, Managing Director at SmartResponse Media: E: petemills@smartresponse.tv M: 07826 929 650 W: www.smartresponse.tv