Broadcaster ITV has said advertising revenues are set to reach the highest in its history this year thanks to a rebound as the wider economy recovers from the pandemic.
The group behind dramas such as Vigil and hit show Love Island hailed an “outstanding” first nine months of 2021 so far, with ad revenues already surpassing levels seen before the pandemic struck.
ITV notched up a 30% rise in ad revenues to £1.3 billion in the first nine months after a 32% hike in the third quarter.
Overall external revenues lifted 28% to £2.4 billion – up 8% on a two-year basis.
It expects total ad revenues to surge by between 11% and 13% in the fourth quarter, putting it on track for a record performance over the full year, with ad revenues set to rise by around 24%.
Shares leapt as much as 12% in morning trading after the update.
Chief executive Carolyn McCall said: “By any standards, ITV has had an outstanding nine months.
“With the combination of broadcast and ITV Hub’s mass simultaneous reach, our brand safe addressable advertising product and the strong economy, 2021 looks set to have the highest advertising revenue in ITV’s history, despite the lockdown in the first quarter.”
The group said its share of viewing for the main ITV channel – a key performance figure for broadcasters – rose to 17% in the nine months to the end of September from 16.6%, thanks to the Euro 2020 tournament, Love Island and dramas such as Manhunt: The Night Stalker and Vera.
However, ITV’s viewing hours are still down, off 5% over the nine months.
The group is investing heavily in programmes through its ITV Studios arm and wider content, with total schedule costs set to be around £1.16 billion in 2022, up from £1.1 billion in 2021.
This includes the Fifa World Cup, the FA Cup and a strong line-up of dramas, which it hopes will drive further increases in live and streaming viewing.
The group saw ad revenues in July up 68%, August up 24%, and September up 16% year-on-year.
This comes up against a difficult prior year when firms pulled back their advertising spend in the early days of the pandemic.
ITV said growth will ease back a little in the fourth quarter as it comes up against tougher comparatives, but it still expects ad revenues to rise by 12% in November and between 5% and 10% in December.
Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said: “As the world of TV changes, more and more content is needed because we now binge TV rather than wait a week for each new episode.
“That trend feeds nicely into ITV’s hands, who were responsible for BBC’s Vigil, as well as a handful of Netflix names.”
She added: “Advertising revenue is picking up compared to last year’s nadir, but on the whole it’s still a tough place to be.
“Overall viewing hours are still down, which is exactly the trend that puts advertisers off splashing out on primetime ad slots.”