Media owners are abusing their power by conditionally selling across
their portfolio of press titles or TV channels, advertisers have warned.
Two thirds of advertisers admit that they have been subjected to
conditional selling in the past 12 months, according to an extensive
survey of advertisers’ attitudes conducted by Media Audits.
The survey found that the majority of advertisers have been involved in
media deals where the channel or title they wanted to use was only
available at a reasonable price if they also used a sister title or
John Storey, the managing director of Media Audits, said: ‘Press and TV
were the worst offenders, with 27 per cent claiming to have been
conditionally sold press titles and 24 per cent experiencing conditional
selling in TV.’
In TV this is thought to be a result of the concentration of TV sales houses, with more than eight out of ten advertisers believing that this
has reduced the level of competition in TV sales.
At the same time, 70 per cent of advertisers firmly believe that
conditional selling is not in their interests.
The survey, which questioned 82 leading companies with a combined
advertising spend of pounds 664 million, also canvassed advertisers on
their favoured method of remuneration for their media companies.
Performance-related pay is increasingly attractive to advertisers, with
more than two thirds already using this method or examining the
possibility of introducing it.
Media commissions of between 2 and 3.5 per cent are the most common,
with more than half of advertisers falling into this band. Of those with
budgets of up to pounds 5 million, 40 per cent paid commission of 3 per
cent or less. Seventy per cent of advertisers with budgets of more than
pounds 5 million paid 3 per cent or less.
As for media spend, budgets for 1996 are expected to be 3 per cent up on
1995. Almost a third of advertisers claim to have changed their
investment in ITV as a result of the inflation last year. The majority
of these say that they have reduced spend on ITV.
More than half of advertisers plan to increase their spend on outdoor
this year, while Channel 5 hopes to attract an average 5 per cent of
advertisers’ 1997 budgets.