Advertisers are scaling back spending on ITV during the traditionally busy run-up to Christmas due to uncertainty about the UK's future, the UK broadcaster has said.
Dame Carolyn McCall, the broadcaster’s chief executive, blamed an “increasingly uncertain economic environment” for a “softening” in marketing spending on its channels.
ITV said that advertising income would fall by 3% in the fourth quarter and by between 6% and 8% next month. Over the full year, revenues would be flat, the firm said.
Marks & Spencer and John Lewis have not launched their festive adverts yet, suggesting a more cautious outlook among retailers than in previous years as the UK prepares to leave the EU.
ITV said its performance in the first nine months of the year was “very much as expected”, with total advertising up 2%, driven by 43% growth in online revenues.
McCall said: “We have an exciting schedule for the remainder of the year and into next year with entertainment shows I’m A Celebrity and Dancing On Ice, and dramas including Cheat, Cleaning Up, Manhunt and The Widow as well as the Rugby World Cup exclusively on ITV.”
Andrew Morsy, UK MD at Sizmek, said advertisers need to be smart and consider where to spend their campaign budgets in order to truly deliver ROI. For example, the walled garden’s reach is vast but limited and excludes a far wider online audience.
“The warning from ITV that advertisers are likely to rein in their spend is an interesting one, considering the current overall advertising picture,” Morsy said. “The outcome of the UK’s exit from the EU might still be up in the air, but the advertising industry has remained robust throughout this time and has continued to flourish in the face of economic uncertainty. Forecasts suggest that, in fact, the UK ad spend is expected to grow from £24.21bn in 2017 to over £26bn by 2020 – and digital advertising in particular shows no signs of abating with overall digital ad spend increasing by 9.9% in 2019.
“Regardless of whether advertisers are concerned or not about the country’s continuing uncertainty, they need to be shrewd about where their money is being spent to truly deliver ROI. The industry is more complex than ever, especially when it comes to digital; and the temptation for advertisers is to pour money into a handful of platforms that feel like ‘safe spaces’ – usually the walled gardens of Facebook and Google. These tech giants are certainly a core part of any marketing mix, but by relying on their reach alone means that advertisers are missing out on a far wider audience on the open web. The political uncertainty we’re currently facing shouldn’t be a reason for us all to rest on our laurels. Consumers need inspiration and incentives to spend their hard earned cash; it’s the advertiser’s job to show them the content – across multiple sites and platforms – that will inform their buying choices.”
