Online ad surge expected to continue

The slump in traditional advertising revenues for commercial broadcasters caused by the "phenomenal" growth in online ads is likely to be permanent, an 18-month inquiry by MPs has concluded.

In a report on new media and the creative industries, the House of Commons Select Committee on Culture warned that broadcasters will come under increasing pressure from the fragmentation of audiences and ad revenue.

MPs also urged Ofcom to allow limited product placement in TV programmes by taking advantage of an opt-out from European Union rules, which may allow a more liberal regime by permitting member states to derogate from the existing ban.

The committee is now investigating the implications of the revenue loss for ITV after the Advertising Association warned that it was unlikely to be able to meet its public service obligations.

Differing views on the impact of viewers skipping ads were expressed during the inquiry. Channel 4 predicted between a third and a half of all TV viewing would be time-shifted within ten years. But the IPA said "ad avoidance" was not a new phenomenon.

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