ITV expects 2% ad revenue rise thanks to World Cup and digital growth

ITV expects 2% ad revenue rise thanks to World Cup and digital growth

ITV is expecting ad revenues to rise 2% in the first half of the year thanks to strong online growth and the World Cup in June which should offset a plunge in April.

Shares in ITV, which was holding its first annual shareholder meeting since Dame Carolyn McCall became chief executive, jumped 4% on hopes that the football tournament will be a boon.

Ad revenues, which includes sponsorship and video on demand, fell 13% in April, partly because of an early Easter, and are set to rise 1% in May and 17% in June.

Spot revenue, known as NAR, dived 15% in April and was flat in May.

ITV dropped their usual advance-booking deadlines for April and May, which meant advertisers got to buy ad spots nearer to transmission time without losing their discounts as McCall sought to boost revenue.

Normally, advertisers only get the full benefit of discounts if they book about eight weeks in advance by the monthly AB deadline.

ITV said it would not comment but a source suggested the dropping of AB deadlines had a neutral effect.

Ian Whittaker, an analyst at Liberum Capital, said June’s likely performance, with ITV forecasting a 15% rise in NAR, was better than agency media buyers have been expecting.

Whittaker described the divergent views of ITV and media buyers as a "potentially worrying question" for analysts.

"The fact that ITV’s projected June growth is so far ahead of what buyers appear to have been saying suggests that advertisers have gone directly to ITV and bypassed the media buyers," Whittaker said in a note.

"We think this is due to specific one-off factors around the World Cup where it is much easier to book selected slots, rather than the greater complexity around booking a whole year’s advertising campaign. But it is an issue nonetheless."

A source close to ITV said its approach to agencies has not changed, although McCall is keen to build relations with advertisers, as she told ISBA in March.

ITV gave monthly figures for both "pure" NAR and total ad revenues including sponsorship and video-on-demand in its trading statement.

"We will consider how to report ITV advertising to be consistent with our revised strategic priorities and how we manage the business," ITV said.

It is thought the broadcaster could stop disclosing NAR on a quarterly basis. Rival Sky only gives a total ad revenue figure.

Meanwhile, Q1 ad revenue was up 3% and online revenues jumped 41%.

Total minutes viewed across the ITV family of channels was up 4% and time spent viewing online on the ITV Hub was up 31%.

McCall said: "While the economic environment remains uncertain online advertising continues to grow strongly."

Whittaker suggested ITV Hub could be benefitting from concerns around brand safety with the tech giants.


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