ITV's Ad Revenue Loss Could be Less than Feared

27 September 2004

British commercial broadcaster ITV may not suffer as much of the predicted £114 million ($205.3m; €166.9m) loss in ad revenue next year as previously thought.

That's the message of a new study by media agency the Allmond Partnership, which suggests the broadcaster could curb losses to less than £30m by pushing slots on its digital channels and applying a tighter application of contracts.

Following the merger of Carlton Communications and Granada earlier this year, ITV signed a 'contract rights renewal' to quell fears that its combined network would hike the cost of ad slots.

Under the agreement, advertisers are entitled to reduce their adspend with ITV in line with a fall in viewing figures, which have slumped by 6.8% over the last nine months.

As next year's advertising contracts are based on this year's figures, ad revenue could theoretically fall by the same amount -- hence providing the £114m deficit figure.

ITV executives, however, argue that the traditionally strong autumn viewing figures will reduce the audience deficit. Opines head of ITV Broadcasting Mick Desmond: "If we can have a strong three months where we demonstrate that the level of decline has stopped and we are holding our audience performance then advertisers are more likely to believe our promises on the market they are buying into next year."

The contract rights renewal also applies to ITV1 only, leaving the way clear for digital channels ITV2 and soon-to-be-launched ITV3 to pull in the audiences.

A final trick up ITV's sleeve could come in the form of strict enforcements of advertising contracts. These specify an eight-week advance booking deadline for ad slots and the broadcaster is entitled to charge a premium for late bookings.

Although Allmond Partnership's managing director Paul Longhurst believes ITV may still face a £30m shortfall, he claims that if the broadcaster pushes its digital channels and contracts "the headline loss of £114m is an unrealistic figure … ITV will work hard over the coming months to ensure no money is lost at all."

Data sourced from:; additional content by WARC staff