ITV warns after advertising income hit by 'cautious behaviour'
Broadcasting giant ITV has warned over a slump in television advertising amid recent "political and economic uncertainty".
The group - home to shows including The X Factor and comedy drama Cold Feet - said TV ad revenues fell 4% in the third quarter and are expected to tumble by around 7% in the final three months of the year.
This will see net advertising revenues fall 3% over the full year, meaning annual profits will be left "broadly" in line with last year.
But ITV said its recent push to boost other revenue streams, such as with content from its production arm ITV Studios, will help offset the ad blow.
Chief executive Adam Crozier said: "In recent weeks the political and economic uncertainty has increased and we are currently seeing more cautious behaviour by advertisers."
But he added: "IT V is now a much more balanced and resilient business. Even against the current uncertain economic backdrop, we expect 2016 earnings to be broadly in line with last year."
ITV revealed that net advertising revenues dropped as much as 11% in October as it also came up against tough comparisons from a year earlier, when the Rugby World Cup was held.
It is forecasting ad revenues to fall around 6% this month and around 4% in December.
But turnover is surging elsewhere, with non-advertising revenues leaping 15% higher to £1.3 billion in the first nine months of the year and total external revenues ahead by 5%.
The group also boosted viewing figures, with main ITV channel's share of viewing up 3% and held flat for the ITV family.
Its online viewing jumped 49% year on year in the first nine months.
ITV Studios saw nine-month revenues rise 18% to £923 million, boosted by acquisitions, such as The Voice creator Talpa Media last year.
The group is slashing costs and focusing spending on content, with aims to make savings of £25 million in 2017.
Mr Crozier said ITV has a "strong line-up" of new and returning dramas, including Victoria, Poldark, Cold Feet, Thunderbirds and Prime Suspect.
The group has also sold around 60 shows worldwide so far this year, such as This Time Next Year, The Voice, Hell's Kitchen and Love Island.
Tamsin Garrity, media analyst at Jefferies, said that, while the ad revenues are forecast to be down heavily, the fall is not as bad as feared.
She said it was "slightly better than our cautious scenario", having pencilled in a drop of more than 8% for the fourth quarter of 2016.