Financial analyst Merrill Lynch has predicted a hopeful 2005 in advertising revenue and audience trends for ITV1. Despite disappointing results throughout most of 2004, advertising looks strong for January 2005. Overall audience share figures were down by 4.0% for the year to date, despite a couple of strong months in the latter part of the year.
Recent UK Television Advertising Trends
Total television adspend in the first quarter of 2004, January, February and March, continued to accelerate from the last quarter of 2003, with Q2 2004 establishing the upward trend, gaining 9.5%. This was due to a profitable June, helped by adspend attributed to Euro 2004. Q3 saw revenues slump by 5.8% due to a weak August and the Olympics being aired on the BBC.
The last quarter of 2004 has been even more sluggish, at 4.5%. However, January 2005 seems to be reasonably strong at 5.4%. A very early estimate, this figure could change significantly as most deals have yet to be signed.
ITV1 under performed throughout 2004, but Q1 saw the first positive increase since Q4 2002, going up 0.6%. Q2 saw a solid 6.8% growth in adspend and Q3 saw a respectable 3.8% rise. July, August and September reverted back into negative territory, losing 0.6% due to a weak November. The forecast for the January 2005 market is still very preliminary, at 2.9%.
According to Merrill Lynch, the big threat to ITV1 advertising revenue has moved on to 2006, although predictions state that ITV1 is likely to start 2005 with two large declines in share of impact. Merrill also forecasts that 2006 will see a 1.9% growth in advertising revenue, based on the market growing at 6.0% and adult share of impacts declining by 4.6%.
Recent UK Television Audience Trends
Overall audience trends dropped by 4.0% year on year, going down from 23.7% to 22.7%, with August being the worst month ever. Although the pace picked up through September, October and November, the figures are still down over last year.
Adult impacts for the last 11 months lost 5.9%, dropping to 40.3% from 42.6%, September came in reasonably well, seeing a 39.9% increase and October saw a solid growth at 40.7%. The first week of December (ending 5 Dec) was flat year on year at 42.2%, if ITV is able to stay flat for the whole month, the cumulative decline would be 5.4%. This compares with Merrill Lynch’s 5.4% full-year forecast derived from an estimated 42.6% share in December.
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