- ITV advertising sales fell 7% to £1.23bn in the first nine months of 2023
- The company benefited much more from last year’s FIFA World Cup.
- Over the next three years, ITV aims to reach £750m in digital revenue
ITV warned its advertising revenue could decline by around 8 per cent this year amid difficult 2022 benchmarks and continued weakness in the linear advertising market.
The broadcaster’s advertising sales fell 7 per cent to £1.23bn in the first nine months of 2023, as more Britons switched from watching TV to using streaming platforms.
Although the Women’s Football and Rugby World Cups provided improvements, the events generated weaker trade than the previous year’s FIFA Men’s World Cup, when ITV achieved its second-highest annual advertising revenue in its history.
ITV actions They fell 6.3 per cent to 61.5p on Wednesday morning, making them the biggest faller on the FTSE 250 index.
Advertising woes: ITV revealed advertising sales fell 7 per cent to £1.23 billion in the first nine months of 2023 as more Britons switched to streaming services.
ITV’s total turnover still stood at £2.98bn, thanks to digital advertising sales rising by a quarter to £283m and a strong performance from 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 driving growth in the segment.
However, ITV plans to delay £10m of spending on original content until 2024 due to issues affecting the advertising sector.
Film and television production schedules have also been affected by lower demand from free-to-air broadcasters and industrial actions by Hollywood unions.
As a result, ITV Studios’ revenue is forecast to rise just 3 per cent in 2023, compared to 19 per cent a year earlier, although the company expects “good global demand” for the division in the medium term.
“ITV continues to make good strategic progress despite the challenging macroeconomic environment,” said Dame Carolyn McCall, group chief executive.
“It is clear that our strategy of growing the digital studio and M&E business is helping ITV offset current headwinds, and we remain confident of meeting our 2026 targets.”
Over the next three years, ITV aims to achieve £750m in digital turnover, organic sales growth of at least 5 per cent each year and an adjusted core profit margin for ITV Studios of 13 to 15 per cent.
The expansion of its online business will depend largely on the ITVX streaming service, whose digital advertising sales soared 23 percent between January and September.
Sophie Lund-Yates, senior equity analyst at Hargreaves Lansdown, said: “Digital revenues are holding up much better than free-to-air channels, given the larger and more engaged viewer base.
“But the growth here is not enough to support the weight of the traditional business as things stand, and the exponential growth needed to achieve this is currently out of reach.”