Media buyers forecast 18-month run of month-on-month rises is poised to end ? with recovery unlikely until September
ITV's advertising revenue is set to fall for the first time in 18 months as it braces itself for a tough summer.
The broadcaster has enjoyed a continuous run of month-on-month surges in TV ad revenue stretching back to late 2009 due to the recovery from the recession.
However, senior media buying agency sources forecast that this run will come to an end in May, adding business may not pick up again until September.
ITV chief executive Adam Crozier and chairman Archie Norman, parachuted in after a torrid 2009 saw the company's share price slump to just 17.5p, inherited a business that has so far required little restructuring.
In March ITV reported it had tripled pre-tax profits in 2010 thanks to a 16% year-on-year surge in TV ad revenues, which pushed the broadcaster's share price briefly to almost 96p ? heights not reached since late 2007.
However, the run appears to have come to an end, with ITV1's ad revenues expected to fall by at least 7% year on year in May and possibly more than 15% in June. Several media industry sources believe revenues could be down by more than 25%. May will be the first month since November 2009 that the broadcaster's flagship channel, ITV1, has suffered a year-on-year TV ad revenue fall.
For ITV the fall in May and June is not unexpected. Last year's football World Cup provided a massive surge in ad spend ? with ITV taking the lion's share. TV ad revenues were up more than 20% and 40% year on year in May and June respectively as a result.
The total TV advertising market is expected to be down about 7% year on year in May and June ? although one senior media buying executive said that the numbers are "slipping all the time".
Although TV advertising revenue forecasting is notoriously difficult, due to the amount of spend booked late by advertisers, industry sources suggest year-on-year falls are likely through to September.
However from September, when ITV will benefit from having exclusive UK rights to live rugby World Cup coverage from New Zealand, the picture will start to brighten.
Later this year heavyweight global Olympic sponsors such as McDonald's are also expected to launch ad campaigns for the London Games next July.
"As we get to the back end of 2011 and into 2012 things are looking fairly positive with big advertiser events in the London Olympics and Euro 2012 football championships," said another media buying industry executive.
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Source: http://www.guardian.co.uk/media/2011/apr/26/itv-ad-revenue-fall
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