Television broadcasters face “severe pressure” as advertisers abandon traditional media in favour of the internet, Sir Martin Sorrell, head of WPP, the world’s second-biggest advertising company, told The Times.

The chief executive said that the quickening pace at which advertisers are switching their budgets to online has created a “fundamental shift” in advertising that would change irreversibly the way in which broadcasters such as ITV and Channel 4 make money.

However, he added that predictions of a total collapse of television advertising were wide of the mark.

Sir Martin said: “Television is under severe pressure at the moment from the internet. There has been a fundamental shift and the pace will quicken, but predictions of a depression in traditional media have gone too far. Television advertising is not going to disappear. It still has pulling power, but the balance will switch.”

The industry guru’s warning came shortly after ITV had reported a 9.6 per cent decline in advertising revenue. Last week, SMG, the Scottish media group, told shareholders to expect a 7 per cent slide in television advertising revenues.

Sir Martin said that revenues from online activity at WPP, whose UK-based agencies include MindShare and Ogilvy & Mather, would increase from 25 per cent of total revenues to a third in the next five years.

The group recently invested $649 million in the New York-based 24/7 Real Media, a digital marketing specialist.

Sir Martin believes that, rather than television disappearing, the boundaries between it and the internet will become increasingly blurred: “Definitions are difficult now. The boundaries between what is the internet and what is TV are becoming more blurred. As a result, media decisions are becoming more complex and puzzling. It is not that simple to separate the two any more.”

Official figures released last week showed that spending on online advertising in the UK increased by 47.5 per cent to more than £2 billion last year, while total advertising spending stayed about the same.

Internet advertising accounts for more than 10 per cent of total advertising spending, while television advertising fell 4.7 per cent last year to 24.1 per cent of the market.

The Internet Advertising Bureau (IAB) has predicted that online could overtake television in the rankings as soon as 2010.

Guy Phillipson, chief executive of the IAB, said: “The internet is the most accountable medium ever invented – that is why it is so attractive. It is also easier to sell products online or at least get people to the point of buying them. Television broadcasters understand the threat, but it is up to the creatives at advertising agencies to find a solution.”

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