Irish television audiences are increasingly drifting from the comfort zone of RTE and other terrestrial channels to check out the alternatives on stations such as Nickelodeon, Paramount Comedy Channel and Setanta Sports. And, bearing out the truth of the old adage that advertisers follow audiences, satellite and cable channels are starting to hoover up millions of euros in advertising revenue.

The latest TV Ad Spend figures compiled by the Institute of Advertising Practitioners in Ireland (IAPI) include, for the first time, figures for the advertising spend on UK-based stations that carry Irish advertising. They also factor in the impact of the new home-based arrivals, Setanta and Channel 6.

Over the first five months of this year, the cable and satellite players brought in 8% of the 94.4m spent by advertisers on television. Sky One was by far the most successful, chalking up 2.1m worth of advertising from Irish media buyers between January and May. Its stablemate Sky News brought in 1.3m. Between them, the two Sky channels accounted for the same level of spend over the first half of the year as TG4.

Advertisers are taking a much keener interest in the cable and satellite channels.

Last month a group of advertisers and broadcasters recommended that Nielsen, which collates audience figures for television stations through a sample of 600 homes, increase its sample size in order to provide more accurate data. The panel is to be expanded to between 800 and 1,000 homes over the next 18 months to allow more precise calculation of viewing figures.

"In September there is going to be a change in the way the panel in Nielsen is weighted, to give more of an emphasis on digital homes", said Jonathan Joyce, TV buying director with media buyer Universal McCann. "There is a fear in the industry that they're not being represented properly."

The heightened interest in the viewing figures is understandable, according to Joe Dalton, managing director of media buyer Precision Media.

The gradual fragmentation of market share is changing the way advertisers and brands think about television advertising, he said. "The sum of the alternatives is becoming a force in its own right".

The increased choice, and the availability of specialist channels such as Paramount Comedy Channel and Setanta Sports, makes it easier to target specific audiences. Dalton said advertisers can look to Setanta, for example, to target young male viewers.

The increased airtime also means the entry level cost of television advertising has dropped dramatically, he added. "You'd pay 10,000 for a 30-second spot on RTE during the Heineken Cup Final . . .

and you can buy spots on some of the smaller stations for 50. That's a wide menu. If I have a client with a 20,000 budget that went on radio in the past, now TV comes into the equation."

Perhaps surprisingly, given the number of competitors for television advertising revenue, RTE's share has held up well. So far this year RTE and RTE 2 have rung up 61m in revenue, 16% up on the same period last year.

"RTE is going to do well in a fragmented market because it can deliver big audiences quickly, " said Jason Nebenzahl, director of OMD Ireland. There may be plenty of alternatives but, as yet, no other broadcaster in the Irish market can deliver the 400,000 plus viewing figures that RTE can.

Even if audience numbers are eroded at the margins, Nebenzahl said, RTE is still well insulated. Realistically, major brands looking to build awareness will still have to look to either RTE or TV3.

"The principle is that all these small stations should be chipping into RTE, but the problem is that you still have to hit your coverage targets and hit them quickly, " Nebenzahl added.

Chris Cawley, co-founder of advertising agency Cawley Nea, said RTE will come under more pressure as other stations gain traction. "An awful lot of the fragmentation that exists in other markets is still relatively underdeveloped here, " he said.

For the moment, though, the state broadcaster is doing a good job of hanging on to both audience and advertising revenue, according to Cawley. "In fairness to RTE, they seem to have significantly got their act together on the television side over the last year or so."

A mix of bought-in ratings winners, such as Lost and Desperate Housewives, and homecooked programming including Podge and Rodge and Stardust seems to have kept both viewers and advertisers happy.

"It's the middle ground TV stations that probably have more to lose, " according to Precision's Joe Dalton. "At the top end they'll be cut out of the big budgets and, of what's left over, there's better value at the lower end, " he said.

Ironically that could be bad news for Sky, which currently has the biggest share of advertising revenue outside of the terrestrial channels.

Already Channel 6 is muscling in on its light entertainment channel Sky One and Setanta is taking up the fight on the sporting front.

It may just be that Sky, which takes significant credit for the growth in digital television and multi-channel viewing in Ireland, will lose out on advertising as a result of its success.