ITV has warned that it expects advertising to decline over the next few months due to “macroeconomic and geopolitical uncertainty” and the absence of a major commercial event such as the European Championships. soccer last year.
The broadcaster hailed a “robust” start to the year, having increased TV and digital advertising revenue by 16% year-on-year to £468m in the first three months.
It remains on track to launch its free, ad-supported service ITVX – its new core streaming brand which will replace the paid ITV Hub and ITV Hub+ brands and also draw on content from BritBox – in the last quarter.
ITV reiterated that the streaming service will help it reach a target of £750m in digital advertising revenue per year by 2026, reducing its reliance on traditional TV advertising.
The broadcaster increased its total external revenue – including revenue from its internal ITV Studios operation, which airs shows such as Coronation Street, Hell’s Kitchen and Love Island – by 18 per cent to £834m for the first quarter.
However, the company said it narrowly missed its April total ad growth forecast of 10%, hitting 9% instead. May is expected to be down 8% YoY, with June down 15%, with the second quarter showing an overall decline of 6% YoY.
ITV slightly beat analysts’ consensus forecast of an 8% drop in ads in the second quarter.
The broadcaster said the strong start to the year means overall advertising revenue for the first half will be up 5% year-on-year and 7% compared to the same period in 2019 before the pandemic.
“As expected, advertising comparisons become much more difficult in the second and third quarters compared to the European Football Championships in 2021 and we are aware of the macroeconomic and geopolitical uncertainty,” the company said.
ITV’s share price, which has fallen more than 40% in the past year, rose 1% after the trade update was released.
The broadcaster said its total streaming hours fell 7%, or 20 million hours, to 247 million in the first quarter. He added that while streaming on his platforms increased by 8% in the quarter, total streaming was impacted by a decision to make fewer of his shows available on other platforms.
“ITV has made the strategic decision to reduce the availability of drama broadcasts and pre-broadcast box sets outside of its own streaming services, such as on Sky and Virgin, where we cannot broadcast and monetize dynamic advertising,” said the society.
“Therefore, this decision does not reduce existing revenues. Over time and with the launch of ITVX, we anticipate that we will see this viewing shift to ITV’s streaming services and be monetized more effectively.