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