TV ad recovery set to continue in January
The television advertising recovery is set to continue, with ITV1 revenues expected to be up between 7% and 10% in January, according to the Guardian.
Last month, ITV announced a 16% increase in ad revenue for the first nine months of 2010, making up for the fall in ITV Studios external revenues – down 10% to £205 million.
Speaking at MediaTel’s recent TV Summit, Adam Crozier, ITV’s CEO, detailed a five year plan for the UK’s largest free-to-air commercial broadcaster, which will involve delivering on strategy; re-balancing the business so revenue is not as reliant on advertising as it is now (74% currently). “There is no silver bullet, it will be hard work,” he told delegates.
“The television advertising market has continued to recover strongly. However this does not disguise the significant challenges ITV faces and we remain focused on delivering the five-year transformation plan. The economic outlook for 2011 is uncertain and we continue to plan on a cautious basis.”
However, media buyers are optimistic about ITV1’s performance in January, predicting that levels of ad spend will continue in the first month of the year. Some forecasts suggest that the broadcaster may even see a 12% year on year increase.
The outlook for the overall UK TV market is also positive, with agencies forecasting a 9% year on year rise in January. However, the first month of each year is notoriously difficult to predict.
At the MediaTel TV Summit, Channel 4’s sales director Andy Barnes remained on the fence with a “flat” forecast for next year, but when pushed 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.