THIS WEEK: Winners under Labour named

News International, Mirror Group Newspapers and BT could be the unlikely beneficiaries of a Labour general election victory, while advertising agencies and branded goods manufacturers may suffer.

News International, Mirror Group Newspapers and BT could be the unlikely

beneficiaries of a Labour general election victory, while advertising

agencies and branded goods manufacturers may suffer.

‘The Devil’s in the Details’, a new report by Ogilvy & Mather on

advertising and marketing under Labour, says restrictions on newspaper

groups holding TV interests will be relaxed to the extent that MGN could

apply for an ITV franchise. News International would also benefit from

this, but, according to the study’s co-author David Muir, New Labour

‘has come to terms with Murdoch and cross-media ownership’.

BT would gain from Tony Blair’s fast-track development plans for the

Information Superhighway, allowing it early entry into the cable market.

It could even be exempted from a pounds 2bn windfall tax Labour plans to

levy on privatised utilities.

The rapid expansion of the cable market will accelerate audience

fragmentation and increase TV inflation in terrestrial commercial

channels. DRTV will become an increasingly effective means of targeting

viewers fleeing from terrestrial TV.

The study predicts that life will get even tougher for branded goods

manufacturers and better for retailers. Own-label will be seen as

encouraging innovation by stimulating competition and improving consumer


Although Labour is keen to tighten up trademark infringement laws, Muir

believes Labour’s pro-competition policy will ‘tip the balance in favour

of imitators and away from the innovators’.

The report warns that Labour’s plan to ban all tobacco advertising will

open the door for restrictions to be placed on other forms of

advertising, particularly alcohol and products targeted at children.

The tobacco ban could trigger action across Europe, hurting ad agencies

with pan-European accounts and leading to a 20% fall in outdoor revenue.

Much of the expenditure in these sectors is likely to move below the

line, boosting direct marketing.

Devil’s alternatives

* Winners: MGN, BT, News International, retailers, direct marketing,

private training companies

* Losers: Branded manufacturers, advertising agencies, alcopops, tobacco

advertisers, ITV, existing cable companies

Source: The Devil’s in the Details by Ogilvy & Mather


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