ITV to suffer in TV ad market slump?

Media buying agencies have forecast a 10% year-on-year slump in the TV advertising market for September, which will exacerbate ITV's financial woe.

ITV1 will be hit particularly hard because of its falling share of viewers and, though income from the growing digital channels will rise 8%, the company's overall TV ad proceeds are expected to be down 11% on September last year.

The broadcaster managed a 2% year-on-year growth in its ad proceeds in the first quarter, despite the market as a whole shrinking by 1%. Modest falls of 1% and 4% are expected for July and August, but the credit crunch and worsening economy are then thought likely to bite.

ITV's share price has declined rapidly in recent weeks, reaching an all-time low of 37.7p last week, fuelling speculation of a possible takeover bid.

Paul Rowlinson, the investment director at the agency Mindshare, said: "The first half of the year predictions were for relatively flat year-on-year growth, which is reasonably healthy for TV, but now we are starting to see evidence of all the underlying economic trends starting to filter through. It is not panic stations yet but it is looking pretty grim in the fourth quarter."

Channel 4 is also expected to see an 11% decline across its TV services, and Five may be down about 9% year-on-year.