Outlook Worsens for TV and Radio Adspend

24 September 2001

Predictions released in recent days are likely to trigger further gloom among British commercial TV and radio companies [although they should be taken with a fistful of salt as the news source, MediaGuardian, omitted to reveal the identity of any of the unnamed ad agencies whose guesses it peddles].

Reports by these anonymous agencies suggest that 2001 ad revenues at leading commercial network ITV could fall by as much 16% (£330 million). Rivals Channel 4 and Channel 5 are in line for respective falls of 6.8% (£43m) and 5.7% (£11.4m).

The worsening outlook accords with recent forecasts from Merrill Lynch, which increased its projected full-year decline in ITV ad income from 13.2% to 14.7%, with an 18% drop in November (down from previous predictions of 8%) and a 13.7% decrease in December (also lowered from 8%).

As reported previously [WAMN: 11-Sept-01], the fall in ad revenue could affect TV production budgets. In a letter to independent producers seen by MediaGuardian, Channel 4’s director of programmes Tim Gardam stated: “C4 is not to date as badly affected as ITV and we will be able to keep the transmission budget level in real terms in 2002 … We will have to be much clearer as to the limits of what we can afford. There are serious decisions to be made about priorities so Channel 4 can continue to make room for the new and unexpected.”

Meanwhile, stockbroker ABN Amro has warned that radio adspend will fall 8.6% in 2001, down from previous forecasts of 3.9%. Next year also looks tough, with growth in radio ad revenue for the full twelve months projected at a meagre 0.3%, compared with earlier predictions of 7.5%.

“The fortunes of TV advertising, which reports data monthly, provides a good indicator of how radio is performing,” said ABN Amro. “We now believe a return to positive growth is unlikely until the third quarter of 2002.”

News source: MediaGuardian (UK)