Agencies are predicting that revenues across all the broadcasters in September will be down year on year, with ITV1 bearing the brunt of the gloom with a 20%-plus fall. However, its rivals are not immune; the overall TV market could be down as much as 10%. It is thought that Channel 4 could dip by about 9%, with Five facing a similar predicament.
Given the interest in ITV's coverage of last year's Rugby World Cup and England's progress to that tournament's final in September, agencies say that a decline was always likely, but many are still taken aback by the significant percentage drops expected to take place so soon in the year.
Broadcasters are pinning the blame on worsening market conditions, as well as the lack of rugby, and although fingers are crossed that the market will flatten out toward the tail-end of the year, the signs are ominous as the economy sets into its malaise.
The prediction of a 'black September' follows a period of fairly moderate declines in other months - about 1% in July and 4% this month so far - after a fairly stable start to the year.
With sectors including motoring and finance, in particular, scaling back their budgets, the rest of the year spells many sleepless nights for the broadcasters, whose hopes now rest, in the main, on the improving fortunes of their digital channels, with ITV2 and E4 among those expected to post marginal increases in year-on-year revenues.
Matt Shreeve, head of agency sales at Channel 4, agrees that September will bring drops in revenue across all the broadcasters, but rejects the suggestion that this indicates a weakening of confidence in the market. 'As the economic situation is becoming worse, it is having a detrimental affect on advertising budgets,' he says. 'Revenue last September was boosted by the opportunities offered by ITV showing the Rugby World Cup, and market revenues grew by 8%, so declines this September would not be a surprise.'
A poor September does not necessarily mean a poor autumn, of course, and Shreeve is confident the market could recover to its usual levels toward the end of the year.
While the Rugby World Cup is a factor in the predicted decline, it is not the only one. Advertisers operating in an uncertain market are understandably holding firm until the latter end of the year, ahead of Christmas promotions.
Richard Oliver, head of investment at Universal McCann, says that, although expected, the downturn is making life very tough for the commercial broadcasters. 'There is no escaping the fact that there is a lot of uncertainty in the market and clients are more reluctant to release money,' he adds. 'In many ways, it's out of the hands of the broadcasters, but they should continue to inform brands of the power of TV ads and work with Thinkbox to get that message out there.'
Commercial TV marketing body Thinkbox is certainly pushing the message hard that advertisers should not abandon TV, because it works.
In a week when BSkyB chief executive Jeremy Darroch announced a 7% year-on-year drop in ad revenue across Sky's portfolio, from £352m to £328m, these are worrying times indeed for TV.
'Our current expectation is for an overall decline in the second half of calendar 2008,' he said. 'There is no doubt that it is tougher out there.'
With all the big-hitters facing similar tribulations, broadcasters face a battle to convince the major brands not to
forsake TV advertising. If they do, the sector's dark cloud could turn thundery far sooner than expected.
Predicted year-on-year change in UK commercial broadcasters' revenues
- ITV1 -20%
- Channel 4 -13%
- Five -9%
- Sky Media -10%
- ITV2 8%
- E4 6%
- Total TV -10%
- Source: agency estimates for September 2008