MEDIA SPOTLIGHT ON: DOTCOM ADVERTISING - Dotcoms’ TV adspend soars as FMCGs turn to other media. Will dotcom TV adspend prove reliable in the long term, Alasdair Reid asks

By ALASDAIR REID, campaignlive.co.uk, Friday, 03 December 1999 12:00AM

In the first quarter of 1999, there were two dotcom clients running television campaigns. For the first quarter of next year, there are 16 already confirmed.

In the first quarter of 1999, there were two dotcom clients running

television campaigns. For the first quarter of next year, there are 16

already confirmed.



What has been happening this year in the US, where the total TV spend of

e-commerce companies is likely to be dollars 1.8 billion, including

dollars 600 million in the final quarter alone, is about to happen here

- albeit on a slightly smaller scale, of course.



Last week, Steve Platt, the managing director of Carlton Sales,

predicted that the adspend of e-commerce companies will leap by a factor

of ten - from pounds 35 million this year to pounds 300 million during

2000.



This, he predicts, will further loosen ITV’s reliance on its traditional

customers - the big FMCG companies - and will accelerate the network’s

evolution, in programming terms, from a focus on slightly downmarket

audiences biased towards women, to an upmarket station chasing youngish

men. Over recent years, that shift has been apparent in its

determination to win big sporting rights and develop quality drama. That

trend looks like continuing.



There are other implications too. Because e-commerce companies are

relatively naive participants in the TV market, they tend to pay a

premium, and that could have a knock-on effect across the whole market.

In other words, FMCG advertisers will face a double whammy, because ITV

will be able to push prices up across the board and claw back discount

from its traditional customers.



’Steve would say that, wouldn’t he?’ counters John Blakemore, the UK

advertising director at SmithKline Beecham. ’I’ve actually heard it the

other way around. If dotcom clients are prepared to pay a premium

against the rest of the market, that might allow us to get more

discount. But I think it could well be true that an influx of new money

could cause an increase in the overall price of airtime. For us, finding

a response to that is an everyday battle - we’re always asking how we

can make our media investments go further so that we can flog our

products.



’The only thing I’m surprised about is that it is happening so fast. I

was in the States over the summer and it had taken off over there, but I

had assumed that it would take 18 months to happen here.’



Is it inevitable that FMCG brands will be forced off ITV? The lessons

from the US are clear. Procter & Gamble, for instance, spends far more

than the industry average on cable TV. There’s every indication here

that FMCG companies are not just looking at cheaper TV alternatives but

also at other media.



Last week, Nestle’s director of marketing services, Philip Buckman,

revealed that his company is now the top supporter of the outdoor medium

in the UK, with a spend of pounds 15 million. TV sales bosses might

smile patronisingly at such a sum, but Nestle is not alone in seeking

ways to counter TV inflation.



Surely, though, there are huge risks involved here for ITV?



Dotcoms may be the attractive and exciting new kid on the block, but

that might not last for ever. In fact, you could argue that it’s almost

inevitable that a huge proportion of these new ventures will not survive

longer than a year or so, and there are pessimists who insist that the

whole sector will suffer a meltdown. They believe the South Sea e-bubble

just has to burst.



Platt, however, argues that he has very little choice in the matter:

’There is no question that the FMCG money dropping out is more than

being replaced by new technology advertisers. And as much as we’d like

to be loyal to our existing customer base, we can’t ignore that.



’If these guys are coming through and pay a rate for it, and make

commitments over a 12-month period, we can’t turn them down. Yes, it’s a

risk that they might be here today and gone tomorrow, but not all of

them will go under and those that survive will be big businesses.’



This article was first published on campaignlive.co.uk

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