ITV has forecast ad revenues will jump between 60% and 75% next month after the UK’s biggest commercial broadcaster suffered an 11% slump in ad revenue last year.
As part of its annual financial report, published today, ITV also revealed that its total advertising revenue was up by 3% year-on-year in the last three months of 2020.
However, it described the first three months of 2021 as “challenging”, with ad revenue forecast to be down by about 6% between January and March. This is despite video-on-demand advertising growing by about 14% over the period.
ITV expects March ad revenue to be up by 8% and April up by between 60% and 75%. The UK advertising market went into freefall from March 2020 when the country went into lockdown, with the TV market slumping by 50% in April and May last year.
Total broadcast revenues were down 8% in 2020, a year dominated by the impact of the Covid-19 pandemic.
Total ad revenue was down 11% despite video-on-demand advertising being up 17% year on year.
However, ITV also reported that online viewing was down by 5% in 2020. The broadcaster has made VOD a higher business priority, having restructured its broadcast division to focus on streaming last year and launching Planet V, an addressable advertising platform that invites brands to mix their first-party data with ITV audience data in a privacy-compliant way.
ITV noted the lack of hit reality show Love Island as a magnet for VOD audiences last year, as well as there being fewer soaps and no major sporting events to broadcast.
Nevertheless, the streaming platform ITV Hub reached 32.6 million registered users in 2020 – up 6% year-on-year.
Total ITV viewing, meanwhile, was up 1% year-on-year. The share of viewing of ITV's family of channels and brands was down 4%, which it attributed to the volume of the BBC’s news output during the year, as well as fewer episodes of soaps, and new content being on pause due to production schedules being disrupted.
In spite of Covid-19 social distancing restrictions remaining in place, ITV said about 90% of its programmes are back in production as of today.
ITV also announced it is launching a Media for Equity fund, where it will take minority stakes within early-stage digital and direct-to-consumer businesses, in return for advertising inventory.
"The scheme will serve as an innovative opportunity for entrepreneurial companies to accelerate their growth and establish their brands by accessing ITV's unique reach and scale," the broadcaster added.
The broadcaster has also joined Channel 4 and Sky to launch CFlight, the total TV advertising measurement system designed by NBC Universal in the US.
The tool uses combined linear television and Broadcaster VOD data to show advertisers and media agencies what the overall advertising exposure is for television advertising, including reach and frequency metrics. This should be made available during 2021, ITV added.
Britbox, the direct-to-consumer streaming platform ITV has launched with the BBC, was described as performing well in 2020, having increased US subscriptions by 50% and being ahead of schedule in the UK with 500,000 subscriptions as of January 2021.
ITV has reported “tough action” on its costs, with £116m made in cost savings – £21m are permanent.
Carolyn McCall, chief executive of ITV, said: “While total revenues and profits were down, our financial performance was ahead of expectations driven by a strong end to Q4 and our firm control over costs.
“We are encouraged by the roadmap out of lockdown. We are seeing more positive trends in the advertising market in March and April and the majority of our programmes are now back in production. However, there remains uncertainty in all markets around the world with the potential risk of lockdowns, which if they materialise will affect revenues.”