Advertisers switch off ITV as virus spreads
ITV shares hit a seven-year low yesterday as the advertising outlook darkens because travel companies are deferring campaigns in response to the coronavirus outbreak.
More than £500million was wiped from the Love Island broadcaster’s value after it warned that advertising revenue would fall by 10 per cent in April.
The 2 per cent forecast increase in first-quarter advertising revenue is also below what some analysts had expected. Shares plunged 14p to 102½p.
CEO Dame Carolyn McCall, pictured, said: “We have seen deferments of travel advertising in March and April, but at this stage it’s really difficult to assess the further implications of the coronavirus.”
She said the softening was limited to the travel industry, where airlines and hotels have seen bookings plunge as the outbreak spreads. This would be partly offset by increased Government spending on a public health campaign.
The gloomy outlook overshadowed forecast-beating annual figures as ITV posted a 10 per cent fall in adjusted pre-tax earnings to £729million on 3 per cent higher revenue of £3.3billion. Advertising revenue was down 1.5 per cent. Its ITV Studios production business grew earnings by 5 per cent to £267million as revenue climbed 9 per cent to £1.82billion.
Russ Mould, investment director at AJ Bell, said: “Many brands will suffer from lower footfall, and the brand owners will be the ones reassessing their advertising expenditure. What’s the point in advertising to a TV audience if there is a lower propensity to spend?”