ITV and Channel 4 Could See Q1 08 Ad Revenue Decline Of £12m

As the gloomy economic outlook leads to a cut in advertisers’ TV budgets, ITV and Channel 4 could see a combined year on year decline in ad revenue of around £12 million from their flagship networks in the first quarter of the year, according to report on MediaGuardian.co.uk.

The biggest declines are forecast to be felt by ITV1, which could see ad revenue fall by almost £9 million, or 2.6%, year on year to around £320 million for the first three months of 2008, according to media buying agency estimates.

According to the report, Channel 4’s flagship network is predicted to be down by almost £3 million, or 1.6%, to the end of March with ad revenues estimated to be around £160 million.

But declining revenues for both ITV1 and Channel 4 are being offset to a significant extent by increased ad spending across the broadcasters’ digital services.

One media buying agency director told MediaGuardian: “There is no doubt that figures are down on what we were saying a couple of months ago. Everyone was bullish before the end of the year, especially about March spending as Easter is falling early, but now we have reached the ad booking deadlines the money doesn’t seem to be there.”

However, a senior sales executive at one broadcaster dismissed the predictions coming from media buying agencies as “scare mongering” and said that revenues are holding up.

MediaGuardian reports that ITV’s portfolio of channels, which includes digital networks ITV2, ITV3 and ITV4, is forecast to be only 0.7% down year on year for the first quarter of 2008, some £371 million in total. This is a drop of around £4 million compared to the same period last year.

Channel 4’s portfolio ad revenue figures, including channels such as E4, will actually see the broadcaster possibly end the first quarter slightly up on the first three months of 2007, at just under £200 million.

This is at this stage perhaps born out by media buying agency figures for the total UK TV market, forecasting that ad revenues will fall by just 0.5%, to £839.6 million, for the first quarter.

However, while this may appear to be a marginal year on year dip it is more than £20 million down on the bullish first quarter estimates agencies were making in the run-up to Christmas.

Initial predictions had put the first quarter 2008 UK TV ad market up by perhaps 2% year on year, which would have meant ad revenues of around £860 million for the period.

Bullish predictions for February and March in particular had seen early estimates of revenue increasing year on year as much as 3.5%. However, both months are now predicted to be slightly down year on year.

ITV: 020 7843 8000 www.itv.com Channel 4: 020 7396 4444 www.channel4.com