ITV battles advertising downturn

Online advertising is set to overtake TV in the near future

ITV has predicted that advertising revenue will not grow during the first half of 2008 as the UK economy slows.

However, executive chairman Michael Grade said ITV would still beat the rate of growth in the UK ad market as a whole for the first time since 2000.

ITV, the top UK commercial broadcaster, is facing tougher competition from online rivals such as Google and Yahoo.

A report out earlier in the year predicted that companies would spend more on online ads than TV by 2009.

'On track'

ITV, home to programmes including soap opera Coronation Street, has been under pressure from shareholders since the beginning of the year.

They have been voicing concerns about ITV's advertising prospects and the increased competition from digital and online channels.

Also, it was recently fined �5.68m after the regulator Ofcom found it had rigged the results of phone-in competitions on the TV programme Ant & Dec's Saturday Night Takeaway.

ITV is in the middle of a turnaround plan overseen by Mr Grade, a former BBC chairman who took the helm at ITV last September tasked with reviving the broadcaster's fortunes.

With increasing audience share, growth in their online operations and increased format sales abroad, Mr Grade said he was confident in the firm's future and said the restructuring progarmme was "on track".

"Across ITV as a whole we are sustaining operational momentum in all parts of the business," he added.

But analysts were in less of a mood to celebrate and ITV's shares fell 1 pence, or 1.4%, to 62p.

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