ITV profits plunge by more than half as advertisers shun mainstream TV

07 March 2024 , 09:09

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Broadcaster ITV said advertising spending dropped significantly in 2023 (Image: PA Wire/PA Images)

ITV has reported a drop in profits due to a "severe decline" in TV advertising.

The broadcaster said it found it difficult to persuade advertisers to spend money on traditional TV ads last year. The company, which produces Love Island, saw growth in some areas of its business, but struggled to maintain its advertising revenue.

Profits fell from £501 million in 2022 to just £193 million before tax last year, according to ITV. The biggest struggle was with "linear" advertising - the industry term for ads shown on TV rather than online.

ITV reported a "severe decline" of 15% in linear advertising, as companies that usually advertise became more cautious due to the struggling global economy. However, digital revenue performed much better, increasing by 19% to £490 million.

The decrease in advertising spending is also affecting international broadcasters, meaning they have less money to spend on TV programmes from ITV Studios, the company explained.

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On Thursday, ITV told investors: "2024 will be impacted by the 2023 US writers' and actors' strikes, which will delay around £80 million of revenue from 2024 to 2025, as well as weaker demand from free-to-air broadcasters in Europe who are holding back spend until they see more certainty in the advertising market."

But ITV Studios had a great year, making more money than ever before. They made popular shows like Love Island, which is now in 27 countries, and Mr Bates vs The Post Office, the biggest new drama on ITV in over a decade.

Carolyn McCall, the boss of ITV, said: "In 2023 we saw the benefit of the actions we have taken to reposition ITV towards higher sustainable growth. Our Studios business recorded the highest ever revenues and profits, and in its first year ITVX delivered strong growth in viewing and digital revenue with investment on plan.

"This growth in production and streaming substantially offset the challenging linear TV advertising market conditions."

Lawrence Matheson