ITV says ad revenue will return to growth this month

Broadcaster predicts Q4 will be 'slightly up', with November being up 6%.

Love Island: lack of summer series has impacted ITV audience ratings
Love Island: lack of summer series has impacted ITV audience ratings

ITV’s ad revenues are edging upwards from the depths of the coronavirus collapse earlier this year, with total adspend down by 7% year on year over the summer months.

The UK’s biggest commercial broadcaster’s nine-month trading update today revealed adspend had progressively improved in the third quarter of 2020, with spend down 23% in July, up 3% in August and down 2% in September – or down 7% year on year for the quarter.

ITV also reported that October was down 1% year on year and highlighted that September and October ad revenues in 2019 were boosted by its coverage of the Rugby World Cup last year.

Some advertisers spent more year on year in Q3 compared with the same period in 2019, including FMCG brands, supermarkets, publishing and broadcasting, telecoms, food and the government, which has spent millions on advertising this year on public-health messaging.

Following the 50% collapse in the UK TV market in April and May, when the pandemic took hold in the UK, ITV suffered a 43% slump in its second quarter ad revenue.

ITV is now forecasting that ad revenue will be “slightly up” year on year in the fourth quarter of 2020, and predicts November will be up 6% compared with last year (assuming the current Covid social distancing restrictions in England end as planned on 2 December). 

For the year so far, ITV’s total external revenue is down 16% year on year for the first nine months of 2020 to £1.86bn. Total ad revenue is down 16% to £1.04bn, driven by a 13% drop in broadcast revenue and softened by a 2% increase in online revenue.

ITV’s total viewing was up 2%, with an increase in live viewing, but online viewing was down 6%. ITV said the fall in online viewing was due to there being no summer Love Island programming and fewer episodes of soaps such as Coronation Street and Emmerdale. However, monthly active users for the ITV Hub were up 1% and dwell time was up 6%. The ITV Hub now has 32.1 million registered accounts, compared with 30.1 million this time last year. 

The important ITV Family share of viewing was down 4% to 22.2%, which ITV said was “partly impacted by the volume of the BBC’s news output during the pandemic”.

ITV added that Planet V, its new addressable TV buying platform, is now responsible for 75% of the ITV Hub’s video-on-demand orders. Omnicom and Publicis Groupe media agencies were given first access to Planet V when it launched last month

“We expect all the major agencies to be using Planet V and 100% of ITV’s VOD orders to be executed via Planet V by the end of the year,” ITV said today.

ITV also insisted it is on track to deliver a previously announced cost-saving target of £60m in 2020, of which £10m is a permanent reduction.

The broadcaster also paid tribute to its production teams for being "determined and innovative", with 85% of 230 productions having restarted after being paused due to lockdown.

Carolyn McCall, ITV's chief executive, said: “We are seeing encouraging signs in both our divisions. Advertising trends are improving, with Q4 forecast to be slightly up year on year, and 85% of our productions in the UK and internationally that were paused as a result of Covid-19 are back in production or have been delivered.

"However, Covid restrictions and further national lockdowns have added production costs and are making it challenging to bring ITV Studios productions back to full capacity.” 

Editor's note: this article was amended after publication to say that ITV's ad revenue in August was 3% up, not 3% down, this year.


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