ITV ploughs cash into online media

Broadcaster invests in the web to attract advertising and fend off competition

ITV's web operation still needs to receive further backing

ITV will continue channelling resources into online media such as interactive content in an effort to increase revenues and fend off competition, company officials said yesterday.

Speaking at an European media conference in London, ITV chief operations officer John Cresswell said that areas that are more important to the business, such as its online operation, will continue to receive investment.

"We are spending a lot of money on winning more viewers not necessarily because we can monetise that, but because we can stop other channels from getting viewers and therefore increase our market share," he said.

Cresswell also said that ITV would be looking to seal more agreements to distribute its current and archive programming on various platforms, following the recent broadcasting and archiving partnership with BT's pay TV service BT Vision.

The broadcaster will need to seek additional routes to profitability, as advertising revenue is predicted to fall by nine per cent during the last quarter of the year and growth prospects for early next year are bleak.

ITV's online business generated a modest £25m in advertising and grew six per cent during the first nine months of 2008. Following a period of underperformance online, the number of unique visitors to ITV.com increased to 8.2 million in October, in comparison to the average of 5.9 million during the nine-month period.

As a consequence, the firm is also increasing investment in areas such as interactive and mobile content, but profitability is expected to be affected by the ongoing investment into Project Kangaroo, the online TV joint venture between ITV, Channel 4 and BBC Worldwide, which has been delayed by a Competition Commission investigation.

As the television group prepares to expand its online portfolio to attract further advertising and sponsorship, as well as product placement, Cresswell said that it is important to ITV to have full control of relationships with partners such as YouTube.

Earlier this year, ITV executive chairman Michael Grade labelled YouTube a " parasite" living off content created from the broadcaster's portfolio, but did not consider the rise of companies such as YouTube owner Google to be a threat to his business.