Television ad revenues to rise in UK

31 March 2010

LONDON: Television advertising revenues in the UK are set to increase this year, buoying media owners after a challenging period during the downturn.

According to Screen Digest, the research firm, ad sales through this medium in the European nation plummeted by 11% in 2009, although the final quarter did bring "a stabilisation in trading."

It predicted that the first half of 2010 will deliver growth of 7%, with the full year generating an uptick of 4.6% on an annual basis.

This latter figure marked an improvement from the level of 2.1% forecast in Screen Digest's previous such study, which was released last year.

ITV, the UK's largest commercial broadcaster, posted a 9% contraction in ad sales in 2009, but totals should climb by 4.6% in 2010 to £1.4 billion ($2.1bn; €1.6bn).

Channel 4 is due to experience growth of 4.8% this year to £740m after a slide of 10.5% last year, while Five, up by 4.2% to £251m,will only partly offset a slump of 23% in the last 12 month.

BSkyB, the biggest pay-TV operator in the country, registered a decrease of 8% in 2009, but is likely to follow this up with a 4.7% increase year-on-year in 2010 to £295m.

The sector's poor performance in 2009 means this year's figures have benefited by comparison.  Events like the World Cup and reports from ITV that demand has leapt by 30% for April and May however also suggest "a robust market recovery so far" in 2010, Screen Digest said.

"Advertising demand and marketers' confidence is clearly up this year ... recovery is spread across a variety of sectors," the company continued.

RBS, the banking group, has also stated that ITV's revenues will jump by 8% this year, rising to between 25% and 30% in the second quarter, coinciding with the World Cup.

Paul Gooden, an analyst at the bank, said there seems to be a renewed "desire among ITV's clients to grow sales after the worst UK recession for a generation."

The categories supporting this trend are non-durable goods and retailers, while "electronics is strong, financial services improving, and cars are stabilising."

Gooden added that the pace of expansion for ITV will slow to 7% in the third quarter, and be largely flat in the closing three months of 2010.

Data sourced from Media Guardian/Screen Digest; additional content by Warc staff