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.
* 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