MEDIA: FORUM; What can be learned from CIA and Laser’s battle?

Whatever the outcome of the Laser-CIA dispute, the television airtime market will never be the same again. Some believe that may be no bad thing - but it could be painful for others. What are the long-term consequences going to be? And who are likely to be the winners and losers? Alasdair Reid investigates

Whatever the outcome of the Laser-CIA dispute, the television airtime

market will never be the same again. Some believe that may be no bad

thing - but it could be painful for others. What are the long-term

consequences going to be? And who are likely to be the winners and

losers? Alasdair Reid investigates



After all the weeks of rumour and speculation about the Laser Sales and

CIA airtime trading dispute, it was something of a relief last week to

find both parties prepared to make public statements - terse though they

were. Laser was still talking tough, threatening to withdraw CIA’s

credit listing and agency commission payments next year. CIA, on the

other hand, was making far more conciliatory noises, promising to put

the sum of money under dispute into an escrow account while an

arbitration process is pursued (Campaign, 1 November).



Whatever the outcome of the CIA/Laser row, the focus is already moving

away from the details of this individual dispute to far wider issues. It

is clear that the past few weeks will be seen as a watershed for the TV

advertising market.



Perhaps not surprisingly the business has been split right down the

middle, not only on who’s to blame and exactly how guilty they are, but

on the best way forward.



So what exactly does the future hold? Last week, many talked about a

worst-case scenario where the current ITV trading system begins to

crumble in the absence of a consensus on what should replace it. They

believed that a mixed economy could arise - this, they argued, could be

very painful for all involved.



How damaging would that be for ITV? If faith in the whole system is

undermined, will ITV begin to lose out? Just what are the long-term

consequences of the current crisis in confidence? Can any good come from

all of this?



David Cuff, the broadcast director of Initiative Media, says that it

would be odd if ITV turns out to be the loser in the long term. ‘After

all, it’s asking for money that’s owed to it - in this case, the sales

house has met its side of the bargain,’ he points out. ‘If other media

owners may try to profit from ITV’s misfortune and misdeeds in some

sectors of the market, I think they could be the losers.



‘The point too is that there can never be any foolproof system. Channel

4 may have a good sales policy - and one that ITV would do well to look

at - but it can still involve negotiating against a number of criteria

that could be open to abuse. The real question is one of business

integrity. I don’t know enough about the current situation, but I

genuinely believe that there are hardly any bad apples on the media

specialist side. The bad apples that there are will be found out,

though, and they will lose business.



‘This whole story has been an education for 90 per cent of clients -

previously they didn’t really want to know what went on. Now, if anyone

is genuinely dishonest, they will be found out.’



Will ITV’s rivals be the only winners in all of this? Andy Barnes, head

of advertising sales at Channel 4, says that’s too simple a conclusion.

‘I hear all sorts of things about people being fed up with ITV’s station

average price system but, to be honest, I’m not aware of any great

impetus out there for change. It entails a lot of risks both for ITV

contractors and advertisers. To sell as we do at Channel 4 we have to

make a decision about the market in advance. If we’d been trading on

station average the last month or so, we could have made a fortune.

Contractors have to realise that if they change their trading system,

there will be months when they have to turn money away. If you are never

overtraded, you never maximise your revenue.’



He agrees that clients will now be forced to look at trading issues in

detail. ‘Some clients who don’t understand the dynamics of trading will

be very negative about all of this,’ he agrees. ‘Some might be positive

because they will believe that this dispute has helped to clean up the

current system. Certainly, people on both sides of the market will be

more circumspect about what they sign up to and what they can and can’t

deliver.



‘We sell ourselves on the quality of our airtime and the unique way that

people watch us - and just because ITV is having problems in trading, I

doubt whether other channels can automatically expect a windfall. But

this will certainly put deal delivery to the fore and we have a spotless

four-year record in that respect - so yes, possibly we can win more

business on that platform.’



Richard Burdett, the vice-president of advertising sales at Flextech

Television, says he has always found it odd that the value of a channel

such as Discovery has always been expressed in terms of the cost of ITV

- from his point of view, a largely irrelevant competitor. ‘A thematic

channel such as Discovery is doing a very different job from ITV and yet

the trading system rewards size and size alone, ignoring the benefits of

the strength of the channel brand, the way it is viewed and the quality

of the advertising environment.’



Burdett can see this changing now: ‘As a result of the current

situation, I think we are likely to see factors such as appreciation

indices, response levels and brand awareness scores influencing that

perceived value of a channel. This will ensure that media owners are

continually investing in the quality of their brands and that has to be

to the benefit of everyone in the market.’



Mark Cranmer, the managing director of Motive Communications, believes

that the crisis could accelerate the evolution of more transparent ways

of trading. ‘It will be progress when clients’ budgets are viewed on

their individual merits. At the moment, both buyers and sellers are

guilty of distorting the market and anything that removes that ambiguity

and distortion will be welcome,’ he says.



‘We are moving to a more dynamic media market in every way. In that

environment, individual campaigns should be able to happen in exciting

ways. The reality is that huge amounts of money are traded bluntly - and

there is no guarantee on the quality of the product you get. It bears no

relation to the marketing communications needs of the clients or -

paradoxically - to the business needs of ITV contractors. A lot of

people are trading blind and I can’t see that situation being allowed to

continue.’



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