Analysts warn of looming challenges in TV ad market

by Fiona Ramsay Media Week 11-Mar-08, 09:45

LONDON - City analysts are warning of a tough TV ad market during the second half of 2008, despite optimism from ITV and Five after they both posted comparatively strong sets of advertising figures for last year.

ITV executive chairman Michael Grade is upbeat about the TV ad market this year, announcing last week that he was “heartened” by the positive response of advertisers to its recent programming overhaul. He revealed that ITV advertising revenues are set to be nearly 2% higher in Q1 2008 than the same period last year.

Meanwhile, Five’s sales director Kelly Williams said the RTL Group-owned broadcaster was “in great shape” in terms of audiences: “For the year we expect the main channel [Five] to be up year on year and the digital channels to be up 30-40%.” He added that Five’s ad share was expected to grow this year.

However, the consensus among City analysts is that challenges loom ahead in the TV ad market in 2008.
Deutsche Bank’s Paul Reynolds said: “ITV is doing a good job in terms of delivering what is within its control, but the direction of the ad market in the next 12 months is on people’s minds.”

Numis analyst Paul Richards warned that ITV’s position was “very much clouded on a macro level” as ad spend on retail and recruitment falls.

Despite Grade trumpeting the performance of ITV’s revamped programming schedule, ITV1’s share of commercial impacts fell by more than 7% among ABC1 adults.