ITV (LSE: ITV) trumpeted online audience increases in a briefing with analysts this morning (Friends Reunited got a record 6.6 million in July, up from April’s 3.8 million after it dropped premium subs). Indeed, COO John Cresswell said: “(Consumer MD) Jeff Henry and his team are delivering great progress.” But, as shown by the two-year postponement of its £150 million online target, they’re having a harder time making any money from those eyeballs. Still, Henry said: “We’re building content businesses we can monetise. We remain confident on the £150 (million).”
What exactly is ITV trying to do online? Though conventional wisdom always held that brief video clips work best online, exec chairman Michael Grade: “Our online strategy is based on what we think is going to be a very big new market with the delivery of longform streamed video. The numbers coming out of iPlayer and ITV.com in terms of speed at which consumers of broadband have embraced longform video suggest that this is going to be a very big new market opportunity for advertisers and us – we intend to be there in a major way.”
Though TV ad sales are pointing down, ITV isn’t hiding behind the same excuse used by newspapers – that ad spend is migrating to the web. Sales head Rupert Howell: “The growth of the internet as an advertising medium is taking business way from direct marketing, classified and local and regional press but doesn’t appear to be taking away from television. What matters is that we outgrow the growth in internet advertising – in the first half of this year, the internet grew as an advertising medium by 24 percent and we grew at 43 percent so we’re growing at nearly double the rate.”
Howell: “We recently, in one period, sold out all video (ads). We appear to be able to maintain our rate on video sales. Jeff and his team have done a stunning job on ITV.com. We’re looking to create more inventory on ITV.com and hold our rates.” Grade added that highest peak-time TV viewing since records began showed people were watching ITV.com shows in their own time, rather than substituting TV viewing.