ITV ad revenues under pressure amid economic uncertainty
The Love Island broadcaster is expecting total ad revenues to fall around 3% in the fourth quarter and be broadly flat in 2018.
Broadcaster ITV has said advertising revenues are coming under pressure amid economic uncertainty as Brexit worries take their toll.
The group behind hit shows including Love Island and I’m A Celebrity said total advertising revenues rose 2% in the first nine months of the year.
But it warned an “increasingly uncertain economic environment” is set to see total ad revenues fall around 3% in the fourth quarter and be broadly flat over the full year.
Shares fell 4% on the gloomier ad outlook.
Carolyn McCall, ITV chief executive, said: “Online advertising continues to deliver strong double-digit revenue growth.
“We are seeing some softening in ITV Family net advertising revenues in the fourth quarter due to the increasingly uncertain economic environment and as a result we expect total advertising to be down around 3% in the fourth quarter and broadly flat over the full year.”
Its third quarter trading update showed total external revenues rose 6% to £2.1 billion in the first nine months of 2018, with turnover up 10% in its ITV Studios production arm and online revenues rocketing 43% higher.
Broadcast and online revenues overall rose 2% to £1.5 billion.
It saw a robust rise in audience figures, with its share of viewing for the core ITV channels up 9% and online viewing up 37%.
Ms McCall said the group had a strong pipeline of popular shows in new territories, including Love Island US and Sunday Night Takeaway in Australia.
New dramas include World On Fire, Noughts And Crosses, Wild Bill, The Bay and Zero Zero Zero, as well as new series of dramas Gormorrah and Line Of Duty.
Roddy Davidson, an analyst at Shore Capital, said: “We are encouraged by the positive momentum experienced during the first nine months of the year and by the outlook for Studios and digital advertising.
“It is disappointing to note the expectation of a weaker third quarter, but perhaps not entirely surprising given the high level of political/economic uncertainty around Brexit.”
Ms McCall, who joined ITV from easyJet in January, is leading a fresh cost-cutting drive at the group that will see it save up to £40 million by 2021 to offset weak ad revenue growth.
It is battling against competition from streaming services such as Netflix and Amazon.