TV ad revenues to rise next year, although forecasts are virtually impossible

The art of predicting what is going to happen to television advertising revenue may be more difficult than ever, but that did not stop the panel at MediaTel Group’s TV Summit from trying.

Speaking at the event in London last week, Channel 4’s sales director Andy Barnes remained on the fence with a “flat” forecast for next year, but when pushed off said he thinks the market will see a small upturn.  Although judging by his previous predictions – he forecast a 6% drop for this year and so far Channel 4 has seen a 16% rise – it might not be worth betting on it, he admitted.

“The past has always been a very good predictor of the future but not anymore… now you have to look at individual areas, target markets and so on… and even then you can still get it wrong,” Barnes said.

ITV’s Gary Digby was of the same view. “It is virtually impossible to predict the market; we live in a world which is much more short-term now.  We don’t get long-term views of client’s ad spend. It is impossible for agencies to predict what clients are going to spend too. My predictions for next year are slightly more optimistic than Andy’s but the only thing I can guarantee is that they’ll be wrong.”

Digby said despite the uncertainty in the market, broadcasters have to make long-term bets and commit to programming budgets.  He confirmed that ITV will spend over a £1 billion on programming in 2011.

“Last year, advertisers significantly reduced spend so it was never just going to bounce back this year,” added Nick Bampton, soon-to-be commercial director of Channel 5.  “Technology changes have also had a huge impact… the business has changed.  The marketing industry has changed to a financial industry and as such, we need to make short-term decisions.”

As for Phil Georgiadis, chairman and chief executive of Walker Media, he thinks TV is flourishing and any hint that online is taking share from TV revenue is untrue.  “The case for online display advertising is yet to be made, I think… it certainly will not be a replacement for TV advertising,” he said.