- ITV’s advertising sales fell by 7% to £1.23bn in the first nine months of 2023
- The firm benefited much more significantly from the FIFA World Cup last year
- Within the next three years, ITV aims to achieve £750m in digital revenues
ITV has warned its advertising income could decline by about 8 per cent this year amid tough 2022 comparatives and continued weakness in the linear ad market.
The broadcaster’s advertising sales fell by 7 per cent to £1.23billion in the first nine months of 2023 as more Britons switched from watching television to using streaming platforms.
Although the women’s Football and Rugby World Cups provided uplifts, the events delivered weaker trade than the FIFA Men’s World Cup the previous year when ITV achieved the second-largest annual advertising revenues in its history.
ITV shares were 6.3 per cent lower at 61.5p on Wednesday morning, making them the biggest faller on the FTSE 250 index.
Ad troubles: ITV revealed advertising sales fell by 7 per cent to £1.23billion in the first nine months of 2023 as more Britons switched over to streaming services
ITV’s total turnover still tipped up to £2.98billion, thanks to digital advertising sales jumping by a quarter to £283million and a robust performance by ITV Studios, its television production arm.
Summer hit Fifteen-Love, the US edition of Love Island, and the second series of war drama World on Fire were among the shows which drove the segment’s growth.
However, ITV plans to delay £10million of original content spending into 2024 due to the troubles affecting the advertising sector.
Film and television production schedules have also been impacted by lower demand from free-to-air broadcasters and industrial action by Hollywood trade unions.
As a result, income at ITV Studios is anticipated to rise by just 3 per cent in 2023, compared to 19 per cent the previous year, although the firm expects ‘good global demand’ from the division over the medium term.
‘ITV continues to make good strategic progress despite the challenging macro environment,’ said Dame Carolyn McCall, the group’s chief executive.
‘It is evident that our strategy of growing the Studios and M&E digital business is helping ITV to offset the current headwinds, and we remain confident in delivering our 2026 targets.’
Within the next three years, ITV aims to achieve £750million in digital turnover, organic sales growth of at least 5 per cent each year, and an adjusted core earnings margin for ITV Studios of 13 to 15 per cent.
Expansion of its online business will rely heavily on the ITVX streaming service, whose digital advertising sales soared by 23 per cent between January and September.
Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: ‘Digital revenues are holding up much better than free-to-air channels, given the wider and more engaged viewer base.
‘But growth here isn’t enough to carry the weight of the traditional business as things stand, and the exponential growth needed to make that the case is currently out of reach.’