European broadcasters face bleak picture of ad cuts

RTL, the only pan-European broadcaster, underlined the uncertain outlook facing advertising-funded television companies with results that showed stuttering growth and few positive signs.

RTL results showing first-quarter sales down 1.7 per cent at €1.2bn ($1.7bn) and operating profit down 21 per cent at €181m was typical of the whole western European free-to-air TV market. Sir Martin Sorrell, chief executive of WPP, and his Group M media buying group, said input costs were having an effect on advertisers’ marketing budgets. But Maurice Lévy, chief executive of Publicis, said his team was seeing no such effect and he believed it would be minimal because advertisers had learnt in the last downturn that the cost of regaining market share was always greater than any money spent on advertising through the hard times. Yet the big broadcasters, to the extent they have any visibility, have been urging caution. ProSieben last week said its first quarter had actually seen a fall in German advertising, although one-off effects such as a government levy on milk-based products had contributed to tighter budgets, chief executive Thomas Eberling said.