Has ITV’s Mantra left them in a trance while Google rules as an advertising superpower ?
The recession has raised its ugly head again and this time it’s ITV that has brought to its knees. This week ITV announced they will be axing 1000 jobs in various areas of the business, one thing can be for certain the ITV executives wont be using the mantra that television is a “brand builder”, while Google is a “brand finder” as companies slash Television advertising spend in favor of other advertising avenues, such as online.
ITV1′s advertising revenue dropped £97m to £1.127bn last year, wiping out the £33m gain made by the digital-only channels. Overall, advertising revenues fell £64m to £1.425bn.” This is mainly due to the recession and advertisers looking for other platforms such as online advertising to get their message across.
The internet is eating into ITV’s advertising income, as more and more people go online. Google’s headline advertising revenues surpassed ITV1’s in the third quarter of 2007 as the search engine demonstrated it could generate more money from sponsored links than 30-second commercials in Coronation Street. With Google making viable claims such as this, its no wonder companies are deciding to decrease conventional media spending in favor of online.
Its not that ITV didn’t try for their own piece of the internet pie they acquired Friends Reunited in 2006, a website that allows people to track down old school friends, trace their family tree, find a partner and a job. ITV’s motive was to access the UK’s £2bn annual classified advertising market and meant ITV became the UK’s eighth-largest online presence in terms of unique users, behind the likes of Google, MSN, Yahoo!, eBay and BBC Online. They also planned to profit from the revenues generated from the sites paying subscribers. But this week even this has proved an unwise decision as the website never took off and Facebook continues to dominate the social media sphere. Moves to make the site free are being made, but the sale of the site would help balance ITV’s books even though the site would make them a loss, due to its predicted depreciation in value.
Google has once again held it’s own in a competitive market and ITV’s accounts are showing that the search engine is possibly going to be able to use the economic downturn to its advantage. Maybe when ITV have left us with no decent programs to watch, more people will head for the internet!