ITV Shows Beginning Of Sustained Ad Recovery With World Cup

However, there is now a prevailing belief that the World Cup boost could actually be the start of broader, sustained recovery. This is particularly good news for the two main ITV groups, Carlton Communications and Granada, which are both still reeling from the financial drain and investor scepticism wrought by the failed ITV Digital business.

June advertising had previously been forecast to show a 6% growth, well below the 10% that is now expected. Early indications from Carlton and Granada put July’s revenue as up 6% year on year. Commercial impacts have increased by 40% for adults and 100% for men during the daytime since the tournament started, a Granada spokesperson confirmed. Impacts for the lucrative male ABC1 demographic have risen by 120% during the competition.

The Guardian today reports that there has been a flurry of late deals by advertisers, riding on the back of England’s continued campaign in the competition, as they face Brazil in the quarter finals on Friday morning. Motor, beer and entertainment brands are all reported to have boosted spending.

Analysts at Lehman Brothers are now forecasting Q4 to show positive growth of 4%; the previous forecast had been for a 5% decline. However, much will depend on September’s figures, says the broker.

September normally shows ad volumes up to 40% higher than July or August; if this were to be the case, ITV should end the year closer to -6% than the -8% previously forecast by Lehman Brothers. This two percentage point difference could translate to a 15% increase in earnings per share (EPS) for Carlton and a 9% EPS increase for Granada.

Lehman is leaving its 2003 forecast of 4.0% growth in ITV ad revenue unchanged. The full forecasts as they now stand are shown in the graphs and table below.