Turnaround for TV ad revenues

Experts predict total TV ad revenues for May will show an increase for the first time in 16 months

Total television advertising revenue for the month of May is expected to show the first increase in 16 months – and be as much as eight per cent up compared with the same month last year.

ITV, the worst affected among the main commercial broadcasters by the downturn in TV advertising, is also expected to see its advertising revenue increase in May, with estimates varying wildly between 0.16 and six per cent.

David Peters broadcast planning director at Carat says: “It [total TV advertising revenue] is still down on May 2000, but the positive news is that it’s the first month since December 2000 that has shown any revenue growth. But it’s only one month and it is too early to say whether that signals the end of the downturn. If we get three consecutive good months, then it would be reasonable to say things are beginning to turn.”

Carat estimates that Channel 5’s revenue for May could be up by more than 25 per cent, Channel 4’s up by five per cent and satellite channels up by more than ten per cent.

Buyers had been expecting revenue to move into growth later this year. This is because the industry was effectively working off a “low base” due to the decline in advertising revenues last year following a lucrative 2000, which had been fuelled by the dot-com boom. But the switch into positive growth has come a little earlier than expected.

Andrew Canter, broadcast director at Media Planning Group, says: “I think that the World Cup is a huge factor in this and it is likely that June’s figures will also be up because that is when the event takes place.” But another industry insider claims that the financial services sector is piling in to TV advertising in May and this could have had an effect on the figures.

The upturn comes as a study by UBS Warburg suggests the advertising recession in the US is over.

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