ITV’s ad revenue plummeted by a "brutal" 42% in April, showing the impact that the coronavirus lockdown is having on TV advertising.
The broadcaster said there was "significant impact on the demand for advertising across most advertising categories" in a trading update released this morning for the three months to 31 March.
ITV, which broadcasts shows including Coronation Street, Ant & Dec’s Saturday Night Takeaway and The X Factor, had previously expected ad revenue to be down by 10% in April after travel brands started to defer their campaigns in early March.
However, this quickly extended to other major advertisers, with Coca-Cola and John Lewis & Partners cutting back on marketing spend.
ITV said that its commercial team is "working very closely" with brands and agencies to come up with "relevant and innovative marketing and advertising opportunities". This has included a 23% discount for March and April bookings and no late booking fees.
For the first quarter of the year, ITV’s total ad revenue (including family net ad revenue, online video-on-demand and sponsorship) increased 2%. January fell 1%, February was up 8% and March was flat. When including the poor performance in April, total ad revenue dropped 9% over the first four months of 2020.
Due to the uncertainty surrounding Covid-19, the broadcaster will not forecast ad revenue for the rest of the year.
Second-quarter decline is likely to be in the double digits, after the Advertising Association and Warc Expenditure Report forecast that TV adspend will be down 46.6%.
Furloughing staff
City analyst Numis labelled the fall in ad revenue "brutal". It reduced its forecast for the second quarter to a decline of 37% and expects the full year to be down 12%. Numis had previously expected ad revenue to be down 7.4%.
In an attempt to manage costs this year, ITV said it has found a further £30m of savings to its overheads – this is in addition to the previously announced £30m.
The business also reduced its programme budget by £100m at the end of March.
ITV has furloughed about 800 people, equating to roughly 15% of its UK workforce. The majority of these people work in ITV Studios. There is also a recruitment and salary freeze.
Total external revenue at ITV dropped 7% year on year to £694m for the first quarter.
Broadcast revenue grew 2% to £500m, with online revenue up 26%, but ITV Studios fell 11%.
The main ITV channel had its best quarter since 2009, with share of viewing up to 17.9%, while the rest of its channels were down 2% with a 23.6% share of viewing – something the business said was "partly impacted by the volume of the BBC’s news output".
Total viewing across ITV was up 2%, with "very strong growth" in online viewing, which increased 75%. Simulcast viewing also rose 112% and reach was up 40% on the ITV Hub.
Dame Carolyn McCall, ITV's chief executive, said: "ITV has taken swift and decisive action to manage and mitigate the impact of Covid-19 by focusing on our people and their safety, and by continuing to reduce costs and tightly manage our cashflow and liquidity.
"We are also ensuring that we continue to inform and entertain our viewers and stay close to our advertisers. Everyone at ITV has responded extremely well to the challenges we are facing.
"We are now very focused on emerging from this crisis in a strong position, continuing to offer advertisers effective marketing opportunities and making preparations to restart productions safely."
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