ITV Ad Recovery Set for September Slowdown

26 July 2002

The recent recovery in ad bookings at beleaguered British commercial television network ITV looks to be running out of steam.

ITV enjoyed year-on-year rises in ad sales of around 10% in May and June (during the soccer World Cup) and 3.2% in July, while August’s figures are expected to show a 6.2% gain.

However, advance booking figures suggest that September’s sales will total £145.3 million ($228.7m; €228.9m), representing growth of just 1.3% – even though in the same month last year ITV cancelled several days of advertising to cover the aftermath of September 11.

The news disappointed media buyers. “If it is about 2%, that's the year's growth gone,” lamented MediaVest UK’s television buying director John Davidson. “For the whole market to be up in 2002, ITV would need to grow 9% in September, 6% in October, 1% in November and a couple of points in December.”

However, the network believes September will benefit from a late flurry of bookings when media buyers return to work after the holidays.

ITV’s dominant shareholders Granada Media and Carlton Communications stressed the positive, describing the outlook as “encouraging”. The network has suffered a year-and-a-half of advertising decline, with aggregated ad revenues from January to September 2002 expected to fall 2.9% to £1.2bn. In light of such troubles, any form of upturn is good news.

Indeed, investment bank Dresdner Kleinwort Wasserstein cited ITV’s summer ad recovery as it upgraded its recommendations on both Granada and Carlton stock from ‘reduce’ to ‘buy’. The bank set a share price target of 120p for Granada and 220p for Carlton, considerably more than their Friday morning values of 89.25p and 171.5p respectively.

Despite such optimism, the spectre of recently deceased dTV platform ITV Digital continues to haunt Granada and Carlton, its parents.

On Thursday, the Football League commenced its legal battle to force the duo to honour a three-year broadcast rights contract signed by the platform before it went bust. The soccer body is demanding £132 million from Granada and Carlton, though the duo claim they are not liable.

Data sourced from: multiple sources; additional content by WARC staff