ITV is forecasting ad revenue to bounce back by 85% this month and up to 90% in June as the UK’s biggest broadcaster begins to recover from the pandemic’s impact on 2020.
In its first-quarter financial results, published today, ITV posted a 6% year-on-year fall in total advertising revenue to £402m, with January down 9%, February down 15% and March up 8%.
The Covid-19 pandemic took hold in the UK in March 2020, when the government began imposing social distancing and work-from-home restrictions, which prompted a collapse in the TV ad market from March. ITV continued to suffer year-on-year declines until August, but had a strong fourth quarter due to a strong festive period.
ITV’s financial statement today shows how strong this year’s recovery is likely to be. The broadcaster said total ad revenue was up by 68% year-on-year in April and is forecast to be up by about 85% in May and between 85% and 90% in June.
These forecasts are even bigger than the 70% estimate an ITV source shared with Campaign at the beginning of March, suggesting that advertiser confidence has been growing amid Covid-19 vaccinations and an easing of social restrictions.
As well as the growth figures reflecting a market returning to normality after last year’s severe recession, ITV said May and June spend was being boosted by advertiser interest in its coverage of the Euro 2020 football tournament (postponed from last summer) and the return of popular reality show Love Island.
Ian Whittaker, the independent media analyst and consultant to JCDecaux, described ITV’s May forecast as “better than expected” and said ITV’s June performance may be even better than the broadcaster predicts.
“Overall, this is a very strong performance and shows the resilience of TV advertising in the UK market, something that may surprise many,” Whittaker added.
ITV’s audience figures presented a mixed picture. The main ITV channel’s share of viewing was up from 17.9% to 18.2%, which helped deliver a 1% increase in total ITV viewing. The broadcaster attributed this to having a “strong schedule” of primetime shows like Unforgotten and Saturday Night Takeaway, as well as its Six Nations rugby coverage.
It did not mention its one-off Prince Harry and Meghan Markle interview with Oprah Winfrey in March, which drew in an average of 11.1 million viewers (peak 12.4 million) and for which ITV sold ad spots as a “special premium buy” outside of normal share deals.
However, ITV’s family share of viewing – which includes channels such as ITV2 and ITVBe – dropped from 23.6% to 23.1% over the period.
The absence of Love Island, which could not film new episodes during the pandemic, is having a large impact on viewing numbers for ITV Hub, its video-on-demand service. Although registered users were up 5% and dwell time was up 6%, ITV reported that online viewing was down 11% in the first quarter. When stripping out the impact of Love Island, ITV said online viewing was up 23% over the period.
Carolyn McCall, ITV’s chief executive, said: “We have made a good start to 2021 with total revenue and total viewing both up, despite the continuing impact of the pandemic. We finished the quarter strongly with the substantial majority of our shows back in production and a recovery in the advertising market.”
ITV has also announced a second investment as part of its new media-for-equity programme ITV AdVentures Invest, which takes minority stakes in early-stage digital and direct-to-consumer business in return for providing advertising inventory across linear and on-demand TV.
The broadcaster is injecting £2m into Respoke, the parent company behind menswear brand Spoke, in the form of convertible loan notes. Last month ITV AdVentures Invest concluded a deal with What3Words, the Cannes Lion Grand Prix-winning location service.