ITV ad revenue decline slows to 4%

ITV has reported a 4% fall in advertising revenues in the third quarter of 2017, a performance that has "reassured" analysts.

Peter Bazalgette, ITV's executive chairman
Peter Bazalgette, ITV's executive chairman

ITV appears to be fighting back against net ad revenue decline, with its third-quarter decline an improvement on the 8% fall in the first half of the year.

The broadcaster blamed the fall on advertiser nervousness around "political and economic uncertainty", although it was cautiously optimistic about a resurgence of FMCG and retailer advertising.

Ad revenues at the broadcaster made marginal month-by-month improvements during Q3. July saw a 5% decline, with August down 5% and September down 3%.

Meanwhile for the nine months ending 30 September, net ad revenues were down 7% to £1.1bn compared to the same period last year.

Total external revenue was down 1% to £2.13bn, while broadcast and online revenue fell 4% to £1.47bn, compared with £1.54bn in the same period last year.

The broadcaster is forecasting a 1% rise in net ad revenue in Q4, with October down 1%, November up 2% and December up 1%.

Full-year ad revenue is expected to be down around 5%, with ITV noting that it is outperforming the TV market.

Analysts Liberum said that the Q3 trading statement "should reassure" investors and that ITV's performance was "broadly as expected".

With advertising revenues in decline, ITV has been investing in alternative revenue streams, such as content, a strategy that it bearing fruit, with ITV Studios enjoying a 9% boost in revenues to £1bn.

Peter Bazalgette, ITV's executive chairman who is running the business ahead of Carolyn McCall's arrival as chief executive in January, highlighted ITV's non-advertising growth.

He added: "This is clear evidence of the benefit of rebalancing the business and generating new revenue streams. We are currently seeing a return to TV advertising from some of the FMCGs and grocers although wider corporate confidence in the UK continues to be impacted by political and economic uncertainty."