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The year ahead: commercials in 2014

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20 December 2013

Advertising revenues are predicted to rise in 2014, providing some welcome respite for commercials producers. But nobody expects the business of making ads to get a whole lot easier.

AD SPEND UP
UK ad spending in 2014 is forecast to increase 6% to £14.8bn, according to GroupM research.

This bodes well for commercials producers in the UK, who go into 2014 on the back of a pretty good twelve months.

Television advertising is tipped to hit £3.9bn in 2014, up from £3.5bn in 2007, just before the recession kicked in.

Certainly, compared to a couple of years ago, the majority of commercials producers who took part in Televisual’s Commercials 30 survey in November, reported that they had enjoyed an upturn in fortunes.

“We’re feeling better,” said Nice Shirt. “Things seem to be getting better as we come out of recession.” Knucklehead commented: “It feels like things are on the up again.”

Still, there’s a strong feeling that the world of commercials production has changed since the pre-digital glory days of television advertising. Few, for example, can fail to note that digital is by far the fast growing area of advertising, accounting for 44.2% of the market, or £6.2bn, in 2013.

“While there has been some impressive creative, the quantity of such pieces does feel thinner on the ground, as does the script flow generally,” notes leading production outfit Rattling Stick. “All too often budgets are woefully inadequate merely because the content is to exist solely online.”

DIVERSIFYING
The increasingly fragmented media landscape looks set to provide both challenges and opportunities for commercials producers next year.

 “An industry wide concern is how we reach a fragmented audience where the viewer’s attention is thinly spread,” says Rattling Stick.

But the tough commercials market means that many companies are taking their creative skills into new business areas. For example, Nexus’ interactive arts offshoot makes digital content, apps, interactive installations as well its own TV shows for the kids market and recently won BFI funding to develop its feature slate. Rattling Stick is co-producing its first feature and is developing TV drama ideas. Studio AKA, meanwhile, is making its first pre-school TV series for CBeebies.

TIGHT BUDGETS
Budgets – or the lack of them – will remain a key focus for commercials producers next year.

“There’s a great deal of underfunded work and more charity work around,” says ad producer Blink. “Agencies are not standing up to clients,” says Knucklehead and often expect production companies to cut their margins rather than explain to the client that the film can’t be made on the money offered. “A big concern continues to be trying to produce over ambitious scripts with budgets that don’t match the production’s needs,” says Caviar. “We’ve been sent some very creative and exciting scripts this past year, but have struggled to produce them without eating into our mark up.”

Pitch costs are also likely to escalate too, as will the amount of companies and directors going after the same job. They are both issues that have vexed many producers over the past 12 months. Business has never been harder says Believe, “with reduced lead times and budgets, and a hugely competitive market leading to escalating pitch costs.”


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