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ITV: ad break provides cheer but its shift online is slow

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For a small national broadcaster ITV has put out some big numbers. Advertising revenues in the first nine months of the year rose 8.5 per cent on the pre-Covid period in 2019. Group sales of £2.38bn climbed by a similar rate. Full year total ad revenues are on course to rise by around a quarter, ITV’s biggest haul in history.

That news delighted boss Carolyn McCall, and her shareholders. Its stock price jumped 15 per cent in morning trading. The UK government, plotting a privatisation of ITV’s edgier peer, Channel 4, might also be making gleeful read-across calculations.

Online viewing was supposed to kill linear TV, but clearly life remains in the model. A boost in the period came from the 34m viewers who tuned in — across ITV and public broadcaster BBC — to watch the Euro 2020 final between England and Italy. Advertisers too have shown loyalty; even native digital brands like food delivery company Just Eat and comparison websites turned to old school advertising.

McCall has built on earlier efforts to diversify, producing shows for third parties, as well as boosting its digital offering. Still, its audience’s switch to online viewing has hurt as has ITV’s tardiness in shifting over. Online viewing as a proportion of total viewing at ITV was under 3 per cent last year, on Enders Analysis calculations, less than a quarter of Channel 4 or the BBC.

ITV does not split out ad rates for online and linear, but is clearly loath to cannibalise TV revenues. Online viewing is rising, but from a smaller base. Also those watching shows on ITV Hub are typically subjected to far fewer ads than on linear programming.

The broadcaster hopes it can segment and target viewers to the same micro level as tech goliaths like Google. But the ranks of competitors for eyeballs has expanded tremendously since the halcyon days of three terrestrial channels. ITV remains a legacy broadcaster that lacks scale. Those with an eye to the denouement will prefer to tune out.

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