MEDIA FORUM: ISBA’s plan for Auntie: panacea or Pandora’s box? Ads on the BBC? Didn’t that idea go out of fashion some time in the 80s? Apparently not - it’s on the agenda again, courtesy of the Incorporated Society of Brit

Last week Gerald Kaufman, chairman of the House of Commons culture select committee, noted that the BBC was becoming a ’hybrid organisation’.

Last week Gerald Kaufman, chairman of the House of Commons culture

select committee, noted that the BBC was becoming a ’hybrid

organisation’.



Not half, as they used to say in broadcasting circles. And Kaufman was

probably generous in his choice of tense. The Beeb surely passed the

point of no return many months ago.



There’s the corporate stuff for starters. Last week it was a pounds 338

million joint venture deal with Discovery Communications to run a US

cable channel, BBC America. It’s the mirror image of a deal it has in

the UK with Flextech.



And they’ve only just begun. The BBC director-general, John Birt, wants

to triple the corporation’s commercial turnover - currently pounds 500

million a year - within the next decade.



But that shouldn’t affect the Beeb’s mainstream UK terrestrial

activities for which it receives pounds 1.9 billion in licence fee

monies. That’s ring-fenced.



Oh yes? BBC 1 is a commercial animal, red in tooth and claw. Not

surprisingly, there are growing calls for ads on the BBC. The

Incorporated Society of British Advertisers has made this modest

proposal several times in the past - usually to gasps of outrage from

those who can vaguely remember who Lord Reith was. And ISBA’s at it

again - it outlined new proposals in a recent letter to the Chancellor,

Gordon Brown, and the letter has also been seen by the Culture and Media

Secretary, Chris Smith.



Bob Wootton, ISBA’s director of media and advertising affairs, explains

why the time is right to revisit this old chestnut.



’The BBC is clearly acting as a flagrantly commercial broadcaster and

faces less restrictions than ITV. It is clearly an inequitable

situation.



’What we want is an open and formal debate about advertising on the

BBC.



We have a number of suggestions about how it might be achieved - for

instance, giving public service advertising the option of using the BBC.

I reckon about 45 per cent of Central Office of Information revenue

would migrate. That would cause a gentle slackening of inflation on

commercial TV.’



As a next step, ISBA could envisage perhaps a total of three minutes

advertising on the BBC per day at peak time. That would bring in pounds

300 million and mean the Government would be able to waive the licence

fee for pensioners. Then, as a third stage, they’d like to ask what’s so

sacred about the BBC - why can’t it run advertising across the board and

still be a public service broadcasting channel, like all of its

counterparts in Europe?



The answer, according to some, is that the change would be too

violent.



Edward Lloyd Barnes, council member of the Association of Media and

Communications Specialists, is certain of that. ’This is a truly awful

idea and I don’t think anyone’s really thought through the economic

dynamics. Has anyone asked themselves how the loss of, say, pounds 500

million in revenue would affect ITV? Would advertisers really be happy

if that sum disappeared from ITV’s programme budgets? The direct

consequence of a programme budget loss of that magnitude would obviously

be a big audience loss. This would put advertisers back to square one

where inflation was concerned.



’Meanwhile, the general public would start refusing to pay the licence

fee on the grounds that the BBC was now funded by advertising. The only

way that we at AMCO would support it would be if ISBA gave an

undertaking to underwrite all revenue lost by ITV - in effect, that

advertisers would spend more. Ideally, though, we would like to see the

BBC shackled. It should not be allowed to replicate the output of ITV

merely to compete for audience.’



David Cuff, the broadcast director of Initiative Media, disagrees: ’It

is feasible. And, yes, it is desirable. If some of the COI spend was

shifted on to the BBC, it would reduce demand by up to 1.5 per cent on

commercial channels.



’And people who say that advertising will spoil the BBC clearly haven’t

noticed that there’s actually rather a lot of advertising already

there.



It runs a huge number of promos - everything from Radio 5, Radio 3,

’Perfect Day’ to corporate pleading.



’The second point is that you can restrict the influence advertising has

on the schedule by slotting ad breaks around the two peak-time news

programmes on BBC 1. Two minutes on either side of each - eight minutes

in total. At ITV prices, that would take only pounds 157 million or just

6 per cent of demand out of the equation.’



And Cuff can’t see it hurting commercial broadcasters. He points out

that there’s no problem with revenue supply to commercial stations - 92

per cent of inflation, which has been running at three times the rate of

the Retail Price Index, is down to revenue growth. If you take a little

of that growth away, it shouldn’t hurt commercial stations as a

whole.



’It certainly doesn’t need to damage programme budgets. ITV spends

pounds 800 million on programming and gets pounds 1.7 billion in

advertising revenue in return. Not many businesses get that sort of

return,’ he adds.



But Jim Marshall, the chief executive of the COI’s centralised TV buying

agency, MediaVest, points out another slight wrinkle. ’Some people have

a very odd view of what the COI is about. It runs structured advertising

campaigns with goals that are every bit as sophisticated as those

pursued by packaged goods advertisers. Some of it, for instance, is

regional.



The idea that we’d ever want anything to do with breaks that have

back-to-back COI ads is hideous. And if we are talking about, say, Army

recruitment, you obviously want to reach young men - and running ads at

9pm on the BBC is not the way to do it.



’In any case, it wouldn’t do much to help inflation. The COI’s spend

probably represents less than 1 per cent of total commercial

revenue.



One per cent audience growth would be far more effective - as would

increased minutage. Putting COI ads on the BBC would be a remarkably

convoluted way of addressing inflation, especially as it would have such

a potentially damaging effect on COI advertising.’