ITV has revealed that demand for advertising in April fell by 42% year-on-year, showing how dramatically the ad industry has tightened marketing budgets. The broadcaster released its first-quarter earnings for the three months to the end of March, which just lands inside the lockdown window.
Total revenue was down 7% at £694m, with its Studios production business down 11% to £342m (hurt by a freeze on production since mid-March).
Broadcast revenue was up 2% at £500m, ITV total advertising up 2% and online revenues up 26%. However, the strong performance ended in April where ITV admitted that the demand for advertising across most advertising categories was responsible for a decline of 42%.
As a result, ITV will reduce costs in 2020 by £60m, made up of £30m already announced savings and a further £30m soon to be implemented. 800 staff (15% of its workforce) have been furloughed so far. Programming budget has also been decreased by £100m (to £1bn) and most of the furloughed staff were from ITV Studios.
Earlier this week, Simon Daglish, deputy head of commercial at ITV, explained to The Drum how the broadcaster is adapting to ride out the lockdown. This means creating new ad formats and making it easier for brands to take advantage of some of the cheapest TV rates there’s ever been. ITV Commercial calls this “working very closely with advertisers and agencies to create relevant and innovative marketing and advertising opportunities”.
It’s not all bad news. In the first quarter, total viewing was up 2%, online viewing was up 75%, and simulcasts up 112%. The main channel’s share of viewing was at 17.9%, its best quarter since 2009. Audiences are flowing into ITV’s channels, and the challenge here will be habit-building and ensuring there’s enough content to maintain them. With Love Island delayed to 2021, as well as the Euros, and the soaps – “the backbone of ITV” as Daglish put it – still to return to production, ITV may have to get creative with its schedule.
There have been some returns.
Loose Women was back this week while Isolation Stories – a newly produced drama – also aired. Across international markets it has seen the resumption of filming of The Chase and The Voice in Australia and The Chase in Germany. It will be looking to finish the current season of Britain's Got Talent in a studio.
Carolyn McCall, ITV 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.”