ITV is expected to announce a slowdown in advertising sales in a trading update this week
Ad revenue growth is believed to have all but stopped in the first three months of this year although first-quarter revenues are expected to have risen by 12%, due to the continued success of ITV’s production division.
Adam Crozier, ITV’s CEO is expected to blame Brexit speculation and broader concerns about the state of the global economy for the likely decline in ad sales.
Audience share across ITV’s portfolio of channels declined by 3 per cent last year, making it harder for the firm to secure advertising interest in 2016.
Laura Davison, an analyst at Deutsche Bank pointed to three factors weighing on ITV’s share price: “[The] UK National Living Wage; falling number of adverts being watched from shifting viewing habits and advertisers being more aggressive on pricing.”
During a meeting with investors in March this year, Crozier pointed to the summer’s Euro 2016 Championship as a major draw for potential advertisers in the second-quarter.
But Deutsche has cited further underlying issues that are likely to prevent a Q2 recovery in ad sales: “A falling number of adverts being watched is of particular concern as it highlights our concerns for the linear TV ad model, where ITV is most exposed in Europe.”
ITV’s Chairman, Archie Norman, dubbed the “turnaround king” for his role in reviving the fortunes of both Asda and ITV, will be formally stepping down from the broadcaster on Thursday. He took up the chairmanship of ITV from Michael Grade in 2010, when its share price was 50p. ITV’s shares have since recovered, and were priced at 216.14p when trading closed on Friday.
Sir Peter Bazalgette, a pioneer of the independent television sector and currently Chair of Arts Council England, will be filling Norman’s shoes.