Shares in ITV took a tumble after the UK broadcaster warned of a shrinking adverting market in the second half of 2011 even though it outperformed the TV sector as a whole in Q1 2011.

For Q1 2011, ITV took advantage of a positive television advertising market to capture group revenues of £500 million, an 11% year on year increase. ITV television advertising was up 12% in Q1, and thus outperformed the market as a whole in though UK winch grew by 10% years on year. Stronger international performance was at the heart of ITV Studios’ external revenues rising 7% to £64 million in the quarter.

The company also reported a strong onscreen viewing performance with ITV1’s share of viewing up 3%, digital channels up 11% and ITV Family up 4% for the four months to the end of April.

ITV predicted that advertising revenues in the first half of the year would likely be up between 1% and 2%. Yet the company warned that going forward it expected revenues to be down in May and June. At the heart of likely falls would be current economic conditions and comparisons against 2010 which enjoyed a boost from the football World Cup in South Africa.

Commented Adam Crozier, ITV plc Chief Executive described the advertising market as volatile and that this state would continue throughout the year. Yet he expressed caution optimism for IT in this period: “The continuing volatility in the TV advertising market underlines the need for us to keep firmly focussed on our five year Transformation Plan... We expected that the ad market in Q2 would be difficult... While we expect to outperform the market across the whole of the year, we remain cautious about the economic outlook.”

Looking at future developments, Crozier revealed that ITV would continue to develop its multiplatform strategy that had seen online TV performance and distribution improved. ITV would continue to invest in making the ITV Player more robust and easier to use, and in the next few weeks will make it available on a range of mobiles and tablets starting with Android smartphones and then the iPhone in Q3.