ITV braces for advertising downturn despite World Cup
ITV is preparing for an advertising downturn sparked by the cost-of-living crisis, despite hoping to boost sales during the winter World Cup.
Chief executive Dame Carolyn Mccall said ITV was preparing measures to cope with a potential ad slump, as economists expect the global economy to tip into recession.
However, she said there was no sign yet of the economic upheaval affecting the market despite preparing for ad revenues to drop by 9pc in July, and 18pc in August.
Those falls were largely caused by the tough comparison with last year’s ad boom surrounding the European Football Championship. In contrast to 2019, advertising revenues are expected to rise by 17pc in July and 5pc in August.
The warning came as total revenues climbed 9pc to £1.9bn for the six months to June, as revenues across its TV production arm, ITV Studios, rose by 16pc to £927m.
Pre-tax profits at the Love Island broadcaster were flat at £301m, with shares up 3pc to 73.57p in late morning trading.
On the potential advertising hit, Dame Carolyn said: “You can’t avoid the cost of living, energy prices, the macro uncertainty, so I think everyone is mindful, as are we, of an impending slowdown of some sort.
“At the moment that is not showing in our numbers.
“We are monitoring that very closely. We are planning a range of scenarios around that as you would expect.”
ITV said it was very confident about growing the studio’s revenues because of the huge demand for content from
US streamers, but said it was having to pass extra costs down to companies commissioning programmes because of the rising costs of making shows.
The broadcaster is preparing to launch ITVX, an advertising-funded streaming app where viewers can upgrade to an ad-free offer and 6,000 hours of British shows through its subscription service Britbox for an extra fee.
ITV said Britbox had defied the subscription slowdown hurting Netflix by growing 16pc to 1.5m since last December and backed ITVX to buck the tough economic climate.