ITV1’s ad revenue is forecast to drop 12% in September

ITV1’s advertising revenue is expected to decline by around 12% year on year in September, quashing hopes that the downturn is nearly over.

Previous forecasts predicted that ITV1 would report a reasonably healthy single-digit fall for the crucial month, which often reflects the mood of advertisers between the slow summer season and the run up to Christmas.

Analysts hoped the commercial broadcaster would “bounce back” with a 5% decline, showing that the worst of the advertising slump is past, according to reports.

However, one industry source said: “[It’s] a worrying sign that we didn’t want, that perhaps the issue is structural and not just cyclical due to the recession.”

ITV1’s revenue, which accounts for almost 40% of all UK television ad spend, dropped 20% year on year in the first six months of the year.

The commercial broadcaster’s ad revenues also fell 4% to £1.43 billion, compared to a 5% fall in the overall TV market, in 2008.

In March, following ITV’s annual results annoucement, Michael Grade said: “Current conditions in the advertising market are the most challenging I have experienced in over 30 years in UK broadcasting. Our priorities have to be aligned to the changed economic context.”

The total UK television market is forecast to fall by at least 12% this September, in line with ITV1’s expected ad revenue decline, though some predictions suggest that total ad spend could fall by as much as 15%.

Channel 4 and Channel Five will also continue to struggle if analysts’ predictions are right – C4’s flagship channel is expected to be down by 16%, while Five, which has arguably had the toughest time among commercial broadcasters during the recession, is forecast to be down by a significant 20% in September.

Meanwhile, Channel 4’s total portfolio, including digital channels, is expected to suffer a 13% decline during the month, while Five’s total network is likely to drop by 19%, and BSkyB by around 10%, according to media industry sources.