MEDIA: FORUM; Should ITV be allowed to sell itself as a network?

Is ITV gearing up to sell its airtime on a network basis? Last week ITV indicated that it was to set up a network client sales operation. Is the network making a mockery of the rule that restricts television sales points to a market-share ceiling of 25 per cent? Should the market be concerned? Alasdair Reid reports’

Is ITV gearing up to sell its airtime on a network basis? Last week ITV

indicated that it was to set up a network client sales operation. Is the

network making a mockery of the rule that restricts television sales

points to a market-share ceiling of 25 per cent? Should the market be

concerned? Alasdair Reid reports’



Last month, when GMTV complained that ITV was effectively selling to toy

advertisers on a network basis, the Independent Television Commission

decided to investigate. After all, network selling is illegal. The

biggest share of the market any one sales point can control is 25 per

cent.



So the ITC wrote to all three ITV sales houses demanding an explanation.

The sales houses wrote back to reassure the ITC that they wouldn’t dream

of breaking the rules. What they were doing, they said, was approaching

advertisers on an individual basis, talking about the benefits of using

ITV and quoting a typical network price in the process - but it was down

to each sales house to reach separate agreements with each advertiser.



The ITC was satisfied with this and, when it received no further

complaints, considered the matter closed. Last week, ITV raised the

stakes. First, it announced that it was planning to target car

advertisers in exactly the same way as toy advertisers (Campaign, 17

May). This is grown-up stuff in more ways than one - the car sector is

worth around pounds 500 million. But that wasn’t all. ITV also announced

that it was planning to set up a broad-based network client sales

initiative later this year.



Blatant? Well, perhaps not. ITV bosses say the initiative markets the

strength of the ITV brand and will reinforce the forthcoming pounds 5

million campaign through M&C Saatchi. Network sales people might talk

prices in a general sort of way but they will not actually be empowered

to do deals.



Is the network continuing to chance its arm, exploring what it can get

away with? Should the market be concerned or should we applaud ITV’s

new-found desire to end internal squabbling?



Mick Desmond, the chief executive of Laser Sales, says that people

should not get confused between airtime sales and aggressive marketing

aimed at specific categories of advertisers. ‘We have spent years being

inward looking and not spending enough time speaking to our customers,’

he asserts. ‘Now its time to re-tell the ITV story.’



‘New channels entering the market are small and niche. We are about

bigger audience and higher profile. But we can differentiate parts of

the ITV output and effectively create a number of channels within ITV.

We aim to get the message across that we can offer better cover

opportunities at better prices than our competitors. Not so long ago,

ITV was seen as 15 disparate companies. We are now seen as a national

product with regional opt-outs and it is important that our marketing

initiatives reflect that.



‘One of the things we are marketing is the price of the network compared

with the competition. A combined initiative makes sense. Rather than

getting three different viewpoints, the advertiser will get one clear

product message.’



Frank Willis, the ITC’s director of advertising and sponsorship, says

that the ITC position remains straightforward - network deals are

outlawed. ‘It would be a nonsense to limit concentration of airtime

sales to 25 per cent of total television ad revenue and then start

designating product sectors for which network selling would be allowed.

That would be tantamount to creating an ITV negotiating monolith for

advertisers in that sector.’



Willis argues that is not enough to say that some advertisers or

agencies would positively welcome the opportunity of one-stop shopping -

certainly the ones that think that way are bound to be in the minority.

He also points to the fact that official Incorporated Society of British

Advertisers and Institute of Practitioners in Advertising policy is that

the status quo should be maintained.



But John Blakemore, the UK advertising director of SmithKline Beecham

and the chairman of the broadcast action group of the ISBA, says that it

may not be that simple. He’s not necessarily against the idea of network

sales.



‘It’s one of those things we need to keep a watching brief on. It would

be far too easy to take a knee-jerk ‘over my dead body’ sort of line,’

he admits. ‘But a network sell may have some plusses - and after all,

airtime is sold on a national basis on all the other channels. If it

makes negotiation with ITV that much easier and cuts down the amount of

time taken up by negotiations, then so much the better.’



Blakemore concedes there could be a potential downside - competition

between the sales houses is removed and conditional selling could be a

threat. ‘Perhaps we could look at what controls could be put in place

and whether they would be both valuable and workable,’ he argues. ‘I’d

welcome an in-depth examination of this and a chance to debate the

points. The ITC will certainly have a role and I would anticipate that

at some point it would want to canvas the views of ITV’s customers.’



Adrian Birchall, the chairman of the Media Centre and spokesman for the

IPA on broadcast issues, doesn’t think there’s cause for immediate

alarm. ‘I would see this as a necessary part of ITV ensuring it keeps

its profile with its customers in an increasingly competitive

environment,’ he states. ‘We applaud that. But there is an absolute

dividing line between that and the actual selling of airtime.



‘The IPA is clearly committed to maintaining the status quo. We have

reassurances from the ITC and the Office of Fair Trading that they will

ensure that the rules are observed. If we suspected that ITV was seeking

to get around those laws, we would express our concerns clearly and

forcefully.’



Channel 4’s sales and marketing director, Stewart Butterfield, says he

doesn’t feel threatened by the developments: ‘We would certainly refer

any problem to the OFT if we thought that the ITC wasn’t fulfilling its

role. But yes, the ITC may have a problem policing this. There is a very

fine line between a network sell and some of the things that ITV is

currently doing, but I am not overly concerned. No matter how integrated

its efforts may be, the ultimate protection we have is that ITV remains

a federal system and there will always be an element of competition

inherent in that.’



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1 Job description: Digital marketing executive

Digital marketing executives oversee the online marketing strategy for their organisation. They plan and execute digital (including email) marketing campaigns and design, maintain and supply content for the organisation's website(s).