Investors to look to advertising spend at ITV

In November ITV said it would cut spending on content by £10 million.

ITV said that it expects ad revenue to drop 8% (Mike Egerton/PA) (PA Archive)

Investors will be hopeful for any green shoots in ITV’s advertising revenues as the broadcaster reports its annual results on Thursday.

They will look to see if advertisers started to up their spend in the last months of 2023, or if the company gives any indication how advertising performed in January and February.

The company struggled to attract advertisers, a key source of money for a broadcaster, last year. It came as a lot of businesses shrank their advertising budgets because they were unsure about how they would perform in an uncertain economy.

Companies are snapping marketing purses shut as they buckle down for the unknown over the coming months

Sophie Lund-Yates, Hargreaves Lansdown

“ITV relies on companies paying to advertise on its traditional television channels,” said Sophie Lund-Yates, lead equity analyst, Hargreaves Lansdown.

“Companies are snapping marketing purses shut as they buckle down for the unknown over the coming months, and that makes moving ITV’s top-line in the right direction a very difficult task.”

In November ITV said that it would cut back spending on content by £10 million and warned that ad revenue was expected to drop 8% in 2023.

In the first nine months of the year ad revenue dropped 7% to £1.45 billion, ITV said at the time. Other revenue from its studio and digital businesses managed to offset this, with total revenue up 1% to £2.98 billion.

The outlook statement for the studios business will be one to watch

Sophie Lund-Yates, Hargreaves Lansdown

Ad spend had started to increase in the third quarter of the year, ITV said at the time, but warned that it was expecting big drops in November and December compared with the same months a year earlier when the Fifa World Cup had been on TV.

Ms Lund-Yates said: “Total advertising revenue is expected to fall 8% for the full year and next week, investors will find out if things have been worse than expected.

“The outlook statement for the studios business will be one to watch.

“The US writers’ and actors’ strike is seeing some revenue deferred to next year, and it will be important to assess the full effect of pent-up demand.”