Merrill Lynch said a year after the Euro 2000 championships, Granada and Carlton Communications, the joint owners of ITV, will witness a sharp fall in advertising sales this July.
Analyst Neil Blackley told sportbusiness.com: ?July ITV advertising is now likely to be 10-15 per cent lower year-on-year, versus our previous assumption of flat. The slowdown will be particularly less for this month because the Euro 2000 championships last year generated a lot of advertising revenue for ITV.?
The effect of major sporting events on advertising revenues for broadcasters is always positive but this year the lack of a major sporting event is hurting broadcasters more than usual. Sandra Collins, marketing director of media buying agency Optimedia says this is because of the current economic climate:
?The lack of sporting events may have contributed to this year?s dramatic fall in ad revenues, but the slowdown in the economy is the main driver to this slump. There is little incentive in today?s economic climate, which includes a lack of a major audience-enhancing sporting competition, for these cash-strapped companies to part with their limited cash piles. The irony is that advertising is now significantly cheaper than a year ago.?
Martin Cannon of the UK Institute of Sport Sponsorship said an economic slowdown may be the driver behind the fall in advertising revenue but he says this could have been rectified by a World Cup or an Olympic Games: ?A major sporting event guarantees a larger audience. If, let?s say, the World Cup was coming to England this year, advertising revenues for those commercial broadcasters reporting on the games would be on a high right now.?
And the trend is not unique to the UK. Sport events seem to be encouragaing advertising spending across the Atlantic too. On Friday, sportbusiness.com reported that the Sydney Olympic Games helped to generate a record 29.5 per cent increase in advertising spending to $3.1bn in the US last year.
But since the end of the Games, the ad market has been soft and demand has been weak across the board. Industry experts foresee 2002 to be a booming year, not because the economy could recover, but because the Winter Olympics will be coming home to Salt Lake City.
A lack of major sporting events in 2001 compared with last year could be contributing to a fall in advertising revenues for commercial radio and television companies, according to a report.
