This year's TV trading season could be one of the most emotional ever. Sixty per cent of TV deals are said to be up for grabs while, thanks largely to Barb, the TV stations are showing extraordinary audience shifts on last year's figures.
While it's still relatively early days in the annual negotiation round, the agencies have already started rattling their sabres, while the TV sales directors have begun posturing back.
Although this can be dismissed as part of the pre-trading ritual, all of the TV sales directors are desperate for their slice of the £1.5 billion of TV revenue that's on offer and particularly in stealing share from ITV.
Campaign surveyed the top-spending media agencies on their TV plans for next year, their attitudes towards the TV industry in general and the individual TV companies specifically.
Some common themes appeared. Most apparent was the way that some TV planners are apparently planning to turn their backs on ITV and redistribute its share to other channels.
This comes as no great surprise - after all, ITV has very publicly had a very difficult year in terms of its image with both the industry and the general public.
Declining audience figures, criticism of the quality of the schedule and the collapse of ITV Digital have all conspired to make a pretty miserable year for the network that once claimed "3" was "the nation's favourite button".
"When I tell people at parties what I do I sometimes think I'd get a better reception if I said I was a sex offender," one ITV sales source comments.
Without a chief executive or a replacement for the outgoing director of channels, David Liddiment, ITV still looks rudderless, but its joint managing director, Mick Desmond, has promised that the fightback has begun.
After a dreadful first quarter of the year the network's summer performance was buoyed by the World Cup and improved a little, although not as much as the rest of TV.
All hopes now lie with the autumn schedule, which recently received a cash injection. But Martin Sambrook, the global account director at Media Audits, thinks that it is simply not enough. "The £25 million sticking plaster will do nothing to stem the red ink," he says.
While this additional investment has been criticised as being too little too late, it'll mean that the negotiation season is likely to start and finish later than in previous years as ITV waits in hope of dragging up its audience share.
While all of the agencies that responded said that they would cut their investment in ITV, which currently takes 54 per cent of TV advertising revenue, the ITV salesmen are not likely to take this lying down.
"ITV is like a cornered animal - it's shit or bust and a fall is not in its business plan," one broadcast director says (anonymity is the name of the game as cards are kept close and brinkmanship is the negotiator's strategy of choice). Starcom MediaVest's refusal to take part in our survey is perhaps a telling sign of its desire to protect the interests of its beleaguered ITV client (Starcom Motive is ITV's media agency).
Although ITV has been publicly wringing its hands and apologising for taking its eye off the ball recently, it still remains the dominant force in commercial television and the only station where it's possible to build mass coverage quickly. For this reason it still has the power to call an agency's bluff, and it's a little too early to tell how many agencies out there have the stomach for a fight. The non-terrestrial stations, which have experienced a dramatic growth in audience, don't seem to be holding out much hope and complain of the conservatism of media agencies.
One TV sales director laments: "Sadly, revolutions don't happen in our industry and ITV will continue to benefit from this."
The vagaries of station average price mean that ITV is always disproportionately rewarded for its performance and several broadcast directors raised the hope that its days may be numbered.
"Hopefully we'll soon see the death of the anachronistic station average price. This mechanism is as much as anything to blame for over-rewarding the poor performance of suppliers," Sambrook adds.
So while the free fall of money out of ITV might be exaggerated, its share is still likely to fall a further three points, which represents a hit in the order of £90 million.
Judging by agencies' plans, this is likely to be redistributed to Channel 5 and the non-terrestrial channels, while Channel 4 and GMTV look like maintaining their status quo.
A further issue that emerged from the survey was a sense of frustration at the inconsistent levels of sales service, client service and marketing from all of the TV stations. These are all considered important virtues given that advertisers seem to be turning their backs on television advertising and putting their money into other media such as direct marketing.
One broadcast director pointed out that TV is just one media in a marketer's armoury and it punches well below its weight in helping agencies show its effectiveness.
There was also criticism that there are very few real salesman left in the TV industry. "The TV sales market has been downscaled in terms of service. There are too many inflexible "order takers" with no autonomy, and too many egos to be massaged. It's time to get a real perspective on what is required from a client's point of view and to sell TV as an essential part of the marketing mix," one broadcast director complains.
Another describes TV servicing levels as "frankly appalling" and says: "Partnerships between the TV stations and the agencies will be built if senior people are engaged in the boardroom as well as on the golf course".
These criticisms raise the question of whether there should be a TV equivalent of the Radio Advertising Bureau - most agencies are desperate to see one formed to help them to market TV to clients. "The TV sales houses are just that - they are run by salesmen and not marketers and the level of client respect is inverse to the length of time the sales house has been around," he adds.
But in light of ITV's own TV Matters conference, it seems unlikely to want to share a platform with its smaller rivals. Observers expect that it will hold out until the network becomes a united force and it will then begin its own efforts in time for the 2004 negotiation season. And given the furore over comments hinting at joint ITV marketing initiatives, this will make next year's trading even bloodier than this year's.
THE MAJOR PLAYERS AND THEIR NEGOTIATING MUSCLES
The managing director, Simon Pardon, splits the buying fraternity into two camps - you either love him or hate him. He's got a reputation as one of the most tenacious negotiators and this year has one of the toughest briefs. Pardon and his executive sales director - the anonymous Simon Lent - are unlikely to roll over and allow huge share points to be taken away from Granada.
In ITV's new spirit of asking for forgiveness, Pardon admits: "ITV has had a tough year and was distracted by ITV Digital, the Nationwide football debacle and talk of mergers." ITV's inflated price is also a matter for concern. But despite this, Pardon thinks that the recent investment in the schedule is beginning to pay off. He says that he'll be stressing the value of ITV peak, the ability of the channel to rapidly build cover and the loyalty of its viewers.
Pardon's challenge is to keep ITV's share of revenue above the crucial 50 per cent level and ensure that he defeats Carlton's Steve Platt for the top sales job at a unified ITV.
Sales supremo Steve Platt and his sidekick Gary Digby are the unashamed hardmen of TV negotiations.
Variously described as a "complete bastard to deal with" and "an awkward sod", Platt is still popular among his peers at the media agencies. But Carlton has had a rotten year and Platt is criticised for retrenching rather than actively selling the virtues of the Carlton channels. The once smooth-running Carlton Sales operation is also described as "difficult to deal with and deliberately awkward", while its client sales department is "appalling".
Nevertheless Platt and Digby really come into their own in negotiations and, like Pardon at Granada, are likely to come out fighting over share points.
The sales chief Andy Barnes has relinquished much of his responsibilities to Channel 4's head of agency sales, Matt Shreeve. "I've seen him once this year," one broadcast director complains.
That said, he's been described as "the acceptable face of TV sales" and his station has won praise for the way it markets itself to consumers and the industry.
Much like ITV, Channel 4 had a miserable first quarter of the year although its schedule has improved and its share of audience is likely to be on a par with last year's. Barnes is taking a bullish stance for next year's negotiations and claims that the Channel 4 story is stronger than ever.
"The requirement to use Channel 4 has got greater not less as the quality of our product has gone up and our share of peak has grown," he says.
Savings are likely to be made from paring down the sales staff and this should lead to greater investment in the schedule. All of the broadcast directors surveyed claimed they'd maintain their revenue shares to Channel 4 so it's likely to remain hovering around the 20 per cent mark.
Five, the newly relaunched Channel 5, has been one of the clear winners of 2002, with improvements in its schedule and audience performance reflected in the media agencies' projected shares for next year. Given ITV's prices, Channel 5 is a useful cost-reducer on a schedule.
The deputy chief executive, Nick Milligan, is considered popular and hard-working and his station emerged as the most admired by buyers. "He's a good people manager, good with clients and an excellent salesman," one buyer comments. Given its relatively small size, the Channel 5 sales team is praised for the service it offers and really works for the shares of revenue it gets.
Milligan is optimistic about next year. "Revenue is up 23 per cent on last year and in 2003 we will reap the rewards of this year's audience growth." While the broadcast directors seem to agree, Billetts Media Consulting's chief executive, Andy Pearch, says there is concern that the station may have peaked this year. But Five's rebranding could help grow the current 7.5 per cent revenue share by at least one share point.
"Sky is going to be the real winner next year. Its airtime is underpriced," according to Pearch. The broadcast directors seem to agree, with the majority looking to increase their shares in the channel. This follows criticism that in 2001 it was more expensive than ITV.
BSkyB emerges as providing a constructive client service and being good at marketing itself to the consumer. The majority of buyers now see BSkyB as an essential element of a campaign targeting young adults, whereas ITV can be dropped from a schedule targeting this audience.
The sales director, Mark Chippendale, has stood in for the popular and clubbable Peter Shea. With a combination of lower prices, growing audiences and a Christmas marketing blitz behind the Freeview DTT platform, Chippendale is likely to approach the trading market aggressively.
The GMTV sales operation works hard to win itself a place on a TV schedule and buyers claim it can easily be dropped. Its sales director, Clive Crouch, is considered a decent old cove, although there is criticism in the way that GMTV sells itself to clients. But it has had a relatively good 2002, with end-of-year revenue predicted to be up between 2 and 4 per cent, albeit off a relatively small base.
Crouch claims that next year bodes well for the station as it continues to dominate the breakfast TV market. Given the nature of the channel's key audiences - housewives and children - it's likely that it will continue to take a share of about 2 per cent, as it has consistently done in the past.
Despite representing stations that the media agencies say can easily be excluded from a schedule, ids is praised for the way that its sales chief, Mark Howe, and his team make the effort to sell the channels to clients and are fleet of foot in delivering what they promise.
Howe received some criticism for distancing himself from the agencies in his new role as the managing director but none of the broadcast directors envisage reducing spend to ids and there could be some improvements in the shares it takes.
But despite the continuing penetration of multichannel homes and improvements in viewing to the non-terrestrials, Howe is still likely to encounter arguments that satellite and cable provides little other than cheap frequency.
"Our view is that there needs to be a step-change in TV buying. Money should start following audiences and you get a more valuable audience in multichannel homes," he says. The ids sales story is of the value of digital consumers as high-spending early adopters.
Viacom Brand Solutions
The managing director, Paul Curtis, shares Howe's frustration, and accuses the media agencies of being "conservative" and over-rewarding the terrestrial channels in negotiations. Curtis is hopeful, however, that next year will be different.
Curtis, who emerges as relatively anonymous and uncharismatic, takes the position that multichannel viewing indicates purchasing power and lifestyle. Most buyers expect to either maintain or improve their shares to the sales house.