Concerns around job cuts in television advertising show no signs of abating with Channel 4 saying it may have to lose up to 200 jobs as the sector continues to struggle.
TV is currently facing the worst decline in ad revenue in 15 years, with broadcasters including Channel 4 looking to bridge the income gap with new streaming innovations or by making cuts across core areas of the business.
ITV cut £10m from its programming budget last year, part of a wider drive to save £50m by 2026.
“Traditional TV advertising is not recovering,” Kate Scott-Dawkins, the global president of business intelligence at Group M, told The Guardian.
“I think what we are looking at is where the print sector was not long ago, digital eats the world in a sense – now it’s TV. We have hit an inflection point and that is now the decline of linear TV, and we expect an ongoing decline.”
New Creative Arts co-founder James Murphy agreed, pointing out that ad clients are “dispersing their budgets across a broader range of media channels”.
“Marketing spend is being atomised across more and more channels and media. They are not saving all of their creative energy for broadcast marketing,” he said.
Speaking about the possibility of job cuts at leading broadcasters, Channel 4 said the move would be a “necessary response to allow us to stand out and succeed in a world of global entertainment conglomerates and social media giants, so we can inspire new generations of viewers.”
Subscribe to Marketing Beat for free
Sign up here to get the latest marketing news sent straight to your inbox each morning
“Like every organisation, we are having to deal with an extremely uncertain economy in the short term and the need to accelerate our transformation to become a wholly digital public service broadcaster in the long term.”
The concern follows on from Channel 4 CEO Alex Mahon’s comments to the Culture, Media and Sport Committee last year as she sought to access emergency funding.
“We are in what I would call market shock territory. This level of advertising fall has only been deeper during the 2008 recession,” she said.
Latest figures show that traditional TV advertising accounted for two-thirds of Channel 4’s total revenues for 2022, making it crucial that the broadcaster is able to pivot to a wholly digital approach. Streaming service revenues – which accounted for 14% of revenues for the same period – are growing, but not fast enough to balance the current rate of recline from traditional ads.
ITV also said in November that it would cut back on new shows, with ITV chief executive Carolyn McCall also blaming the downturn on a “challenging macro environment”.
It had warned in July 2023 that earnings had fallen 52% to £152 million and total advertising revenue fell 11%.
