Analysis: ITV faces challenges, but still has everything to play for
ITV posted a mixed bag of results in its half year trading update this week. Despite total advertising revenues having fallen -5%, the broadcaster’s online revenues are up 18%, boosted by the continuing success of Love Island.
The commercial broadcaster now plans to double down on its digital strategy, with confirmed plans to launch both BritBox and its addressable ad platform for ITV Hub by the fourth quarter of this year.
Plans to launch a second, winter series of Love Island to run each year alongside the summer series have also been announced, to begin in 2020.
Here, industry experts analyse the significance of the results.
Tom Roberts, CEO, Tribal Worldwide London
“ITV’s 5% dip in ad revenue may point to the decline of an ageing terrestrial behemoth, but the shoots of recovery are clearly visible and if all goes to plan, ITV is actually in a very strong position. Online revenues surging 18% are a sign of the increasingly digital times. Later this year Britbox will launch, its addressable programmatic platform will also launch on ITV Hub around the same time, and – best of all surely – Love Island is making a Winter return.
“ITV has learnt the hard lessons of its failed ITV Digital service offer 20 years ago. Now it has relative mastery of the digital ecosystem, able to offer advertisers targeted access to roughly 80% of 16-34 year olds in the country who use ITV Hub, as they watch the shows they like at a time that suits them.
“Audiences may have changed, but ITV is changing with them – whether they’re consuming content through their games console, Chromecast, or their app, ITV knows who they are, where they are, and can make an educated guess at what they want. That said, the world of digital is one of constant revolution, and if ITV isn’t already building ecosystems around the future of content consumption (AR/IoT/VR), it could well suffer.”
Gregor Chalmers, AV Director, The Specialist Works
“The news that ITV would be extending their amnesty on late booking fees is welcome in the current market. With a new Prime Minister and continued Brexit uncertainty advertisers are increasingly looking for more flexibility in their media plans, so this is a smart move by ITV as they look to position themselves as partners rather than just suppliers.
“This increasingly collaborative approach is no doubt one reason for why they have managed to beat the market in their H1 figures, coupled with their focus on delivering a more robust and accountable online platform. Their growth in this area is to be commended, and as they look to add addressable TV to the mix it is clear where the majority of any growth in 2020 is going to come from.
“The addition of a second series of Love Island is an intriguing one, and we await to see how well it fits into the Q1 roster which can sometimes be a tricky period in which to land bigger shows. While it is the channel’s golden goose, both in terms of the appeal to viewers and the way in which ITV have been able to drive commercial partnerships, it will be interesting to see how well viewers respond in the depths of winter.”
Christian Polman, CSO, Ebiquity
“ITV’s results highlight the broadcaster’s continued challenges to grow digital and addressable TV revenues ahead of the losses in linear impacts, which we highlighted as a significant challenge for TV broadcasters – and therefore brands – in our recent ‘TV at the Tipping Point’ report.
“Doubling down on Love Island is sensible, given the draw among young audiences. As is the nature of media today, the quality of content reigns supreme, especially as consumers shift viewing habits. As such, the level of competition with other content, including from the likes of Netflix – who have a large arsenal of production budgets – will be a critical factor to the continued success of Love Island.
“Thanks to ITV’s Hub, its flagship programme can remain attuned to young audiences’ viewing habits of ‘playing catch up’, which may entice advertisers concerned at the declining impact of linear TV or the lack of advertising space on the likes of Netflix.”