Economic Analysis of the TV Advertising Market
This report, commissioned by Ofcom from PwC, combines the latest econometric modelling techniques with industry thinking and expertise to build an economic model of the UK television advertising market. The results update and supplement the work of David Hendry on TV advertising elasticities carried out in 1992. Given the fundamental changes to the TV advertising market since Hendry’s work, this updated model will be of critical importance to future analysis in the TV advertising market. Ofcom is responsible for regulating broadcasting and related services. In order to inform our work in the broadcasting sector, and to develop a strong evidence base for further analysis, Ofcom commissioned PwC to build an econometric model of the UK television advertising market. This model was used to:
• Determine the elasticities for TV advertising on ‘traditional’ channels (channels 3, 4, and 5) and multichannel channels; and
• Produce forecasts of TV net advertising revenue (NAR) to 2014 for traditional and multichannel channels. ...