STV, the Scottish broadcaster, has announced an against the grain increase in TV advertising in its 2019 results with adjusted operating profit up 13% to £22.6m, the highest it has been in a decade.
Following the flat results delivered in 2019, STV has seen a 2% increase in total advertising revenue to £101.6m. This was driven by strong digital revenue growth (up 37% to £13.0m) and an 11% increase in regional advertising - likely linked to the increasing targeting granted by the digital product.
Online viewing was up 23% and video-on-demand (VOD) streams were up 37%, driving a 44% increase in ad impressions. This was driven by the STV Player which saw a 17% registration increase to 3.5m, that figure equals 80% of Scottish adults.
Just last month STV overhauled its website and its apps, hoping to improve the user and ad experience. The launch of the STV Player on Sky boosted streams by 30% - you can see why it is such a valuable platform for Disney+ and Netflix. After the failed STV 2 venture on linear, the brand appears to be finding its feet delivering digital TV to Scots.
It has also unlocked regional advertising growth, with a £10m attracting more than 160 new advertisers to the TV ecosystem since launch.
Meanwhile STV stakeholder ITV last week saw a 1.5% drop in ads pend and warned that the spread of the coronavirus has severely limited spend from travel brands, which is contributing to a projected 10% ad revenue reduction at the national broadcaster.
Much like ITV, the broadcaster is looking to reduce its dependency on TV ad spend. It has a target to make one-third of its profit from outside traditional TV advertising by end of 2020. In 2019, non-broadcast earnings sat at 28% of the total.
Simon Pitts, chief executive officer of STV, said: "An operating profit increase of 13% when national advertising revenues are down illustrates our growing resilience and the exciting growth potential of our regional, digital and production businesses. In 2019 STV was the most popular peak time channel in Scotland, ahead of BBC One for the first time in six years.
"We continue to make excellent progress with our strategic growth plan and have laid solid foundations for future growth, including in STV Productions where 2019 saw a return to high-end drama for the first time in a decade with the critically acclaimed The Victim and Elizabeth is Missing for BBC One. We also made two exciting investments in entertainment and drama companies to significantly strengthen our creative pipeline. 2020 has started with a range of new commissions and recommissions, including the biggest ever order for Antiques Road Trip and a new 10-part series for Discovery.”
Despite Brexit and the coronavirus, STV remains “positive about the outlook for 2020”.