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Broadcaster’s third quarter update reveals it is on course for record TV ad revenue in 2021
Thursday 18 Nov 2021 Author: Mark Gardner

The latest figures from free-to-air broadcaster ITV (ITV) have challenged the accepted view that linear television (where the viewer can only watch the programme scheduled by the broadcaster), is undergoing a period of rapid structural decline. 

It has been suggested that the trend for a younger demographic, in particular, to tuen to streaming platforms instead threatens the economic viability of linear television as it caters to an ever-dwindling audience, thus reducing its appeal as an advertising medium. However, this view appears to be at odds with the direction of travel apparent in ITV’s third quarter update (10 Nov).

This indicates a real renaissance in television advertising, rewarded by a plethora of analyst earnings upgrades and an 11% jump in the share price.


ITV reported a strong recovery from the pandemic. It now anticipates annual advertising revenue growth of 24% to a record level. Significantly the level of growth compares with analysts’ forecasts for 17%. This new guidance implies a rise in the 2021 consensus earnings per share figure from 13p to 15p.

Another positive facet of the results was the third quarter revenue figure of £833 million, which was significantly ahead of analysts’ expectations.

The nine-month revenue figure for both its broadcasting and studio production business was better than both 2020 and 2019, helping to balance out the reliance on more volatile ad revenue.

Looking forward, a strong 2022 for media and sporting events including the Football World Cup, Winter Olympics and Commonwealth Games is likely to help sustain the momentum on the advertising side.

In commentary on the third quarter numbers, Liberty Sky Advisors media analyst, Ian Whittaker makes an insightful comment regarding the unexpected vibrancy of linear television. ‘The focus on AVOD (advertising video on demand), can hide what was obviously a bounce-back in the linear TV product….which looks to have been up in the low to mid 20’s year over year over the nine months.

‘This is a sign that the product still remains of relevance to advertisers while AVOD allows advertisers to tap into digital budgets.’ Online sectors including food delivery and car-retailers have been particularly influential in driving demand for television advertising.

This was reflected in recent comments from Darren Bentley, chief customer officer at on-line car retailer Cazoo. ‘TV advertising is a critical part of our marketing strategy,’ he noted. ‘By investing heavily in TV right now, we can grow brand awareness and trust quickly, generate significant short-term sales, and know that business will also reap the longer term benefits that only TV advertising provides.’


Linear TV still accounted for more than 95% of ITV’s total viewing hours in the nine months to 2021. A couple of factors have contributed to this marked revival in the appeal of TV advertising.

First, inflationary pressures, according to Whittaker are ‘forcing companies to advertise, as they push up prices’ and ‘continued funding of new start-ups (the global level again reached a new high in Q3 2021)’ are also helping to boost demand for TV ads.

Second, there are tentative indications that television advertising is starting to benefit from the difficulties impacting social media companies post Apple’s IFDA changes (as part of its IOS 14 update, Apple has given users the option to block the identifier for advertisers at the app level). This means the IOS 14 update will require apps to ask users for permission to collect and share data.


This has potentially negative implications for the advertising revenue of social media platforms that have been reliant on direct response advertising (a type of marketing designed to illicit an instant response by encouraging users to take a specific action).

In their recent third quarter results both Facebook and Snap revealed that their direct response advertising had been hit by the changes introduced by Apple. If this trend persists then ITV could witness a longer-term recovery in television advertising revenue as advertisers shift their budgets towards both linear TV and ITV’s AVOD offering.

There is also the benefit for advertisers that its products will be pushed alongside heavily curated content where the risk of being associated with anything potentially controversial or harmful which could damage their brand is significantly less than on the internet.

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