Media: ITV sparks new sales clash - ITV’s new sales policy has angered some clients, who believe it will shoehorn them into inflexible deals. With ITV’s share of audience falling, an unseasonal clash is brewing. Anne-Marie Crawford reports

It’s that time of year again. ITV and media agencies are at loggerheads over how to spend advertisers’ budgets next year.

It’s that time of year again. ITV and media agencies are at

loggerheads over how to spend advertisers’ budgets next year.



A certain amount of posturing and sabre-rattling is only to be expected

as each side fights to get what it wants for the following year.

However, what is unusual this time is the level to which the stakes have

been raised.



The debate centres on ITV’s new sales policy - sanctioned, though

apparently not instituted, by its new chief executive, Richard Eyre. ITV

is to pursue deals with clients based on their total TV spend, rather

than their share of ITV spend. Those clients that don’t agree a share of

broadcast deal may be penalised.



The move makes perfect sense for ITV as it will shore up its overall

share of ad revenue, forecast to rise just 1.4% to pounds 1.68bn this

year.



Major battle brewing



The situation is in danger of escalating from a mere trading dispute

between agencies and the three ITV sales houses to a potentially major

dispute between clients and ITV itself. The Office of Fair Trading says

it is aware of disquiet in the industry about the new policy but as yet

no evidence of collusion has been found.



So far, the OFT has had no official complaint, but a spokesman says: ’We

have a duty to monitor the market for competition issues which might

arise. It sounds the sort of thing we’d be interested in.’



Things are so grave that many advertisers may not even be on-air in

January because of a failure to conclude a deal, and many advertisers

are considering upping their spends on national channels.



The Incorporated Society of British Advertisers is so concerned that it

has formally asked the IPA media policy group for its view on the

matter.



As this article went to press, the IPA was meeting to discuss its

position.



Clients are holding firm to their position. In the same way that share

of broadcast makes sense for ITV, it makes no sense at all to clients,

since it could force up airtime prices at a time when Eyre and his new

team have promised to deal with the issue head on.



As Nigel Brotherton, communications manager at VAG, says: ’Share of

broadcast is not a good thing for advertisers as it appears to be no

guarantee of the audience ITV is going to deliver. You could say ’yes,

I’ll spend 65% of my budget with ITV’, but if I only get 45% of the

audience I’m stuffed.’



Judy Jackson, media manager at Barclaycard, goes further and says she is

considering writing to the ITV contractors to make them aware of her

opposition. ’Advertisers won’t put up with it, it’s restrictive and it

takes away our freedom. Audiences are declining because the programming

is not good enough. I expect to be able to buy quality audiences.’



Clients draw the line



Advertisers are certain to fight to stop themselves being shoe-horned

into deals and their tough stance could ultimately hurt ITV.



As John Storey, managing director of Media Audits, says: ’If ITV’s

audience share continues to fall and clients are penalised under

share-of-broadcast deals for wanting to move their money to the likes of

Sky and C5 Flextech, then the whole ITV trading debacle will reach new

heights.



’Clients are tired of having to pay more for their airtime as a direct

result of ITV’s under-performance. If in a year or two’s time, ITV

attempts to penalise clients for wanting to reward the success of ITV’s

competitors, the negotiations will break down and ITV will lose a lot of

money on top of having lost a lot of audience.’



The festive season is not likely to begin early for ITV.



% share of viewing

                    1997   1996

ITV                 55.6   61.2

Channel 4           18.2   20

Channel 5            5.3    n/a

Cable/satellite*    20.9   18.8

Source: IPA third quarter 1997

*inc BSkyB



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