A view from Gideon Spanier

Let's be upfront about this: TV can still hold its own

TV buyers are gearing up for one of the most important weeks of the year for broadcasters as the annual trading season kicks off.

Channel 4 will host its upfronts, a preview of its programming for the coming year, at Old Billingsgate next Tuesday. Then ITV takes over the Palladium in the West End on Thursday for a "gala" presentation – a step up from previous upfronts held at ITV’s headquarters.

Given that ITV and Channel 4 represent £3 billion in annual ad sales and more than 70 per cent of the market, the upfronts matter. It’s the broadcasters’ chance to woo media buyers as negotiations begin in earnest over trading deals, which will usually involve an annual commitment by agencies to spend a share and volume of client ad money, linked to audience ratings.

What’s intriguing this year is that the market has changed in several significant ways.

First, there are now only three TV ad sales houses: ITV, Channel 4 (which handles UKTV and BT) and Sky (which handles Viacom, Discovery and others). Channel 5, which was the fourth and smallest player, vanished in May when its owner, Viacom, moved those advertising sales to Sky after a boycott by one of the biggest agency groups, Omnicom.

Agencies wield their power by pulling their money in this way, as WPP did briefly with Channel 4 in 2013. But when there are only three TV sales houses, it is harder for buyers to make such threats.

This raises a second issue, which is TV’s surprising strength. ITV this week reported an 8 per cent rise in ad revenue in the third quarter, helped by the Rugby World Cup, and expects to be more than 5 per cent up this year.

TV remains unrivalled as an ad medium when it comes to high-quality entertainment, audiences at scale and a safe brand environment. Viewers enjoy communal moments, such as last weekend’s final episode of Downton Abbey, which pulled in 8.8 million viewers.

Doom-mongers talk about how the set-top box and on-demand viewing mean we can skip the ads, but they fail to see the bigger picture: we aren’t missing our favourite telly. And targeting by demographic and location, using technology such as Sky AdSmart, means ads are becoming more relevant and bringing in hundreds of new advertisers to TV.

The third and, arguably, most interesting reason for TV’s great survival has been the crisis of trust affecting digital advertising, with ad-blocking, fake views and other woes. While online has many virtues as a direct-response medium, there’s growing recognition of its limitations when it comes to building awareness or affection for brands. Long live television.