Google is facing an exodus of adverts from its Youtube video site after several high-profile names discovered their ads had appeared in close proximity to extremist content.

This could be beneficial for more traditional forms of advertising – including television – and therefore have positive implications for one of our Top picks for 2017, ITV (ITV).


Liberum analyst Ian Whittaker is a fan of the free-to-air broadcaster with a ‘buy’ recommendation and 340p price target.

He says feedback from media buyers (the professionals who buy advertising space) suggests ITV’s ad revenues are tracking better than the -15% fall ITV suggested for March.

This decline reflects in part the timing of Easter which is significantly later this year compared with 2016.

Comparatives for 2017 should get easier as the year goes on given advertising spend fell-off considerably through the course of 2016.


TV remains a very effective means of advertisers getting their message across to consumers.

It is more transparent than online advertising where there are growing fears that advertisers are essentially being defrauded and/or their message is seen alongside under-vetted content.

Whittaker comments: ‘Anecdotally, feedback from media buyers is suggesting that trust issues have rattled the digital sector and that advertisers are increasingly concerned about the brand reputation damage from having their adverts appear alongside extremist videos (and also potentially providing advertising money to these groups).

The analyst sees two ways in which ITV could benefit.

‘Advertisers shift money back towards traditional media including TV (and ITV).

‘ITV can push its online video advertising offering as a safe offering to clients who will know that their adverts will not appear alongside extremist material.

'The fact that such online video revenues are potentially very high margin (we think margins could be 80%+ and ITV has indicated that the cost per thousand rate for its online video advertising product is c.4x that for ITV TV) is also an obvious benefit.’

Issue Date: 20 Mar 2017