ITV expects its total advertising revenue to drop by 9% year-on-year in its final quarter, as uncertainty circles the upcoming Budget.

In a Q3 trading update, the broadcaster said its advertising revenue remained flat year-on-year, having dropped 5% in the year-to-date against a strong advertising performance in 2024, driven by the men’s Euros.

ITV’s total group revenue increased by 2% in the year-to-date, driven by revenue at ITV Studios and its digital advertising division jumping by 11% and 15%, respectively.

However, in its expectations, the broadcaster’s TAR is expected to drop by around 6% in the full year, as a result of the softening of the UK economy and corporate uncertainty in the lead up to the Budget.

As a result, ITV has identified £35m in additional temporary savings in its media and entertainment division for the final quarter, which is set to offset the expected TAR reduction.

Chief executive at ITV, Carolyn McCall, said the broadcaster had delivered a good performance in a "tough advertising market".

She added: "Both our businesses are performing well, reflecting the significant transformation we have delivered. Our strategic initiatives continue to progress well, and we remain confident in delivering good growth in ITV Studios revenue and digital revenue for the full year. This is supported by laser-focused strategic cost management and underpinned by our resilient and highly cash generative linear broadcast business.

"UK macro data is showing a softening economy, with increased uncertainty in the lead up to the UK Budget which is impacting the wider advertising market, and we are adjusting our costs to match this current reduction in demand. We do not anticipate these temporary savings to impact our ability to deliver our strategic plan. We continue to expect to outperform the broadcast advertising market in Q4, and have a strong programme slate for Q4 and into 2026, including the men's 2026 Football World Cup."

Following the announcement, shares in ITV fell by over 2%, after dropping by 8% in the year-to-date.

Investment director at AJ Bell, Russ Mould, said the upcoming Budget has had a major effect on ITV’s results.

He concluded: "Chancellor Rachel Reeves can take the blame for ITV’s share price slipping on better-than-expected results, at least as far as the UK broadcast network is concerned.

"Businesses are fed up with uncertainty around the Budget and the lack of clear guidance over whether taxes will go up or not. This is having a negative impact on money spent internally such as delaying decisions on hiring or holding off from expanding facilities. Companies are reluctant to spend money if they suddenly find their cost base changes once again.

"That uncertainty has spread to promoting products – businesses recognise the outlook for consumers is also cloudy, and so they’re being more cautious about spending on advertising until the Budget happens. Naturally, that’s terrible news for ITV, which has guided for weaker advertising demand in the fourth quarter, citing the Budget as the key factor."

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