ITV has seen a strong performance in the first six months of the year, as the broadcaster’s World Cup coverage and the phenomenon of Love Island has seen viewership numbers skyrocket and total ad revenue grow 2%.
June saw an upsurge in ad revenue of 22%, followed by a further 9% increase in July; ITV’s total advertising revenue now sits at £890m.
Carolyn McCall, CEO of ITV, commended the broadcaster’s “fantastic” viewing figures both on-screen and online, with ITV drawing in an average of 24.3m viewers during its exclusive coverage of the England v Croatia World Cup semi final.
However, ITV forecasts a marked drop in ad revenues over the third quarter of the year. Total advertising revenue is therefore expected to be up just 1% for the nine months until the end of September.
Although ad spend from the entertainment and leisure categories was high around the World Cup, ITV continues to see declines in spend from advertising categories including retail, FMCG, finance and travel.
ITV is now continuing to target the demographics that it says advertisers demand the most, particularly young and male audiences, and has seen the 16-24s share of commercial impacts on ITV2 up 19%.
[advert position=”left”]Much of that is attributed to the Love Island effect – the reality TV show achieved the second highest audience ever recorded on a digital channel, and ITV has now sold the format to seven other countries.
However, with total non-advertising revenue now accounting for 52% of ITV’s total revenue, up 14%, ITV is no longer solely reliant on UK advertising. As such, it’s looking to grow direct-to-consumer revenues as part of a three year strategy to address the challenges traditional TV broadcasters face.
Also outlined in its future strategy is plans to invest £60m across the business over the course of three years, with £40m to be invested in 2019.
This will be offset by cost savings of £35m-£40m for a net impact of £20m-£25m; in 2020 and 2021, ITV plans for in year investment to be totally offset by cost savings.
“ITV will be more than TV – it will be a structurally sound integrated producer broadcaster where we aim to maintain total viewing and increase total advertising revenue; it will be a growing and profitable content business, which drives returns; and it will create value by developing and nurturing strong direct consumer relationships, where people want to spend money on a range of content and experiences with a really trusted brand,” said McCall.
“We will deliver this strategy by building greater capability in data, analytics and technology as well as developing the great creative and commercial talent ITV already has. Executing the strategy will enable us to continue to deliver sustainable returns to our shareholders.”
