ITV cautions over summer fall in ad revenues

ITV has posted a surge in advertising revenues, but cautioned over a tougher summer as it comes up against last year’s boost from the European football championships and uncertainty in the wider economy.

The broadcasting giant behind hit shows including Love Island and I’m A Celebrity… Get Me Out Of Here! said total ad revenues lifted 16% in the three months to March, helping wider external revenues lift 18% to £834 million.

It said April also saw a strong performance, with ad revenues up 9%, though it is braced for a steep decline over the rest of the second quarter, forecasting a drop of around 8% in May and 15% in June.

The group is coming up against tough second-quarter comparatives from a year ago, when Euro 2020 helped ad revenues rocket 89% higher, while it also flagged wider uncertainty amid the cost-of-living crisis and the Ukraine war.

The group said: “As expected, advertising comparatives get much tougher in the second quarter and third quarter against the Euro football championships in 2021 and we are mindful of the macroeconomic and geopolitical uncertainty.”

ITV still expects the first half as a whole to see ad revenues lift 5% thanks to the bumper first quarter.

Chief executive Dame Carolyn McCall said the group was on track to launch its new on-demand platform called ITVX in the final three months of the year, which is set to help it deliver a target for at least £750 million in digital revenues by 2026.

The group unveiled ITVX alongside annual results in March, when it also spooked investors with plans to increase digital content investment, spending £20 million, and £160 million next year for ITVX.

Overall spend on programmes are expected to reach £1.23 billion this year and £1.35 billion next year.

The new ITVX platform will replace the ITV Hub brand and will give subscribers the choice of watching ad-funded content free of charge, or to trade up and buy ad-free content, such as BritBox.

Dame Carolyn said: “We are making good progress in our goal to supercharge streaming by increasing our hours of content by 50% in the quarter to 6,000 hours and making available the majority of scripted programmes in full for streaming at the same time as the initial broadcast.

“All of this provides a solid foundation for ITVX – our free, ad-funded streaming service – which is on track for launch in the fourth quarter and we remain confident that we will deliver at least £750 million of digital revenue by 2026.”