ITV targets advertisers with AFP as ad revenue falls

LONDON - ITV is talking to Boots, Tesco and Reckitt Benckiser about advertiser-funded programming opportunities as it tries to offset the sharp drop in advertising revenue on ITV1 with new sources of revenue.

The broadcaster is talking directly to the advertisers and has also been touring London ad agencies with proposals. Nicky Buss, ITV's newly appointed advertiser development director, has seen Clemmow Hornby Inge and Mother. The initiative is being led by Ian McCulloch, ITV's commercial director.

Boots, ITV and Mother are already discussing the possibility of the retailer backing health-themed programming. However, talks are said to be at an early stage.

The initiative is being received well by advertisers, who are increasingly questioning the value of traditional spot advertising and are interested in investigating alternative communications channels.

McCulloch said: "We are now increasing our focus on working more closely and directly with advertisers as well as creative agencies.

This adds value for all parties and delivers longer-term, more stable and more focused relationships.

"Our sales teams now create bespoke brand briefs for advertisers to see how they can work with the programming assets we have -- and there are a number of branded-content ideas we are looking at right now."

The broadcaster's revenues declined by 4.6% in the first six months of this year. The decline is attributable both to the constraints of the Contract Rights Renewal mechanism and to a lack of enthusiasm from advertisers.

ITV is attempting to pressurise Ofcom into abolishing the CRR mechanism. McCulloch revealed that ITV was maintaining a continuous dialogue with Ofcom, ISBA, the IPA and major advertisers about the issue.

ITV's argument is that it will no longer be able to offer advertisers mass audiences on its flagship channel if the CRR mechanism continues to be implemented.

ITV is said to be working towards CRR being removed in time for the 2008 trading season.

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