OFT widens probe into TV ad trading

Attempts by agencies and TV sales chiefs to play down the Office of Fair Trading’s investigations into TV sales policies have met with continued OFT enquiries, amid concern that the investigation is now widening to include the entire TV trading system.

Attempts by agencies and TV sales chiefs to play down the Office of

Fair Trading’s investigations into TV sales policies have met with

continued OFT enquiries, amid concern that the investigation is now

widening to include the entire TV trading system.



Agency insiders fear the probe could be a prelude to an investigation of

agency deals and station average price.



In its initial letter to the Institute of Practitioners in Advertising,

it emerged this week, the OFT asked a series of questions including:

’What would be the advantages and disadvantages of the ITV sales houses

moving to a share of total TV advertising method of calculating

discounts?’; ’Is ITV station average price an appropriate basis for

charging for ITV advertising?’; and ’Can you suggest any other method by

which the ITV companies could increase their share of TV advertising

revenues?’



Last week, after Campaign broke the news of the OFT’s investigation into

the ITV sales houses’ ’share of broadcast’ deals, the IPA’s Media Policy

Group chairman, Ray Kelly, issued a statement insisting that the IPA saw

no cause for concern with individual ITV sales houses asking advertisers

to guarantee a share of their total television spend because this didn’t

break the 25 per cent ceiling on control of total television

revenue.



But the OFT wrote back to the IPA at the end of last week expressing

surprise at some of the IPA’s comments and asking for further

explanation.



The letter even suggests that ’share of broadcast’ deals voluntarily

agreed between advertisers and individual sales houses could have an

anti-competitive effect on other stations.



Now the OFT is to meet a delegation from the IPA on 6 April to seek

clarifi-cation over a number of trading issues.



Bernard Balderston, the media manager of Procter & Gamble, acknowledged

that some advertisers were opposed to the station average price system,

but said: ’I don’t see where the OFT is coming from on this issue.’ He

added: ’I can understand the OFT looking at agency share deals. My guess

is that there are areas the OFT could investigate.’



- The Incorporated Society of British Advertisers is said to be planning

a closed seminar on station average price.