ANALYSIS: Clients shift cash from ITV

Disenchantment with ITV is reflected in a new Media Audits survey of top UK advertisers. Conor Dignam takes a closer look at the poll’s findings

Disenchantment with ITV is reflected in a new Media Audits survey of top

UK advertisers. Conor Dignam takes a closer look at the poll’s findings



ITV is in trouble. The disillusionment and disappointment of advertisers

with last year’s performance is being expressed in vigorous efforts to

find other media to pump their budgets into.



This year’s survey by Media Audits was based on the answers of 82 of the

UK’s most powerful advertisers about how they will spend their money

this year and next. Between them they account for an advertising spend

of pounds 664m and include leading retail, FMCG, financial and motoring

clients.



Their annual budgets range from more than pounds 15m to less than pounds

1m. According to the survey, the average increase in budgets this year

is just 3%. Only advertisers with budgets between pounds 10m and pounds

15m are going above that (see top graph).



Service call



The factor they all have in common is that they are looking for new

media opportunities and are no longer satisfied with the service they’re

receiving from ITV.



The survey found that 63% of clients’ media spend would be with

television, 28% with the press and the remaining 9% with other media.



But, alarmingly for ITV, almost 27% of advertisers claimed that they had

changed their investment plan this year, shifting spend away from the

network because of complaints about its performance.



Total TV investment in ITV among the advertisers will this year drop to

66.1% compared with more than 70% last year. And the channels that

advertisers are switching to are Channel 4 and satellite and cable (see

lower graph).



Also making gains at the expense of television, and particularly ITV,

are radio and outdoor. Two-thirds of the sample said they would be using

radio this year, of which half will be increasing their investment. More

than half (55%) said they will be increasing their outdoor spend.



Advertisers are clearly putting their money where their mouths are. The

survey found that almost 30% of advertisers believed there had been a

decline in the quality of sport on ITV, with Sky TV regarded as having

improved its sporting coverage by 34%. The majority of clients (82%)

agreed that the broadcast rights for major sporting events should be

protected by legislation for terrestrial television.



There is little light relief in ITV’s comedy output either, with most

advertisers believing Channel 4, Sky TV, and the BBC all do a better

job. The one genre where ITV can take some comfort is drama, which it

positions as its flagship brand, and where advertisers believed series

such as Band of Gold, and Kavanagh QC, helped it improve on last year.



John Storey, joint managing director at Media Audits, which acts for

clients to assess the value of their media campaigns, said the survey

showed the strongest drive by advertisers to look for alternatives to

their usual media since 1989.



‘The launch of Channel 5, the growth of satellite’s audience and the

problems with ITV are encouraging advertisers to look at every

opportunity open to them,’ says Storey.



The encouraging news for Channel 5 is that almost all of the advertisers

surveyed were planning to put cash behind it during its first year. The

biggest loser looks set to be ITV, with 91% saying they would fund the

investment by scaling down spend on the network. Fifty-seven per cent

said they would pay for Channel 5 advertising by taking money from

Channel 4, and 27% said that their resources would be pulled out of

satellite and cable.



The average level of investment in Channel 5 would be just over 5% of

their 1997 television budgets. The preferred cosy of selling airtime on

Channel 5 is a price relative to the average price of ITV stations. The

programming that advertisers want to see holds no surprises: an ‘ITV

2’of films, sport and soaps. Comedy, quizzes, documentaries and

children’s TV were not regarded as priority areas.



Advertisers are not standing still waiting for Channel 5 to arrive.

Several large advertisers over the past couple of years, including Heinz

and Unilever, have invested larger slices of their budget in below-the-

line. But the survey found that 40% of advertisers are unhappy with the

measurement and accountability of some direct marketing methods.



The survey also found high use of new media, with 50% already on the

Internet, while CD-ROM, video and DRTV were all being used by

significant numbers (see box 1).



James Walker, media development director at J. Walter Thompson, says

‘There is a fundamental shift in the perceptions of a whole raft of

advertisers who are reviewing the role of television within their media

mix. It is ensuring that the old relationship between TV and advertisers

is becoming a thing of the past.’



Concentrated concern



If the media future promises new opportunities for advertisers it also

carries concern about the concentration of media sales points, and the

threat of conditional selling. Almost 80% of advertisers are against the

relaxation of current restrictions on cross-media ownership.



More than half of the survey also say they believe European Union

involvement in advertising rules is a serious threat to the UK industry.



Tony Blair, it seems, has convinced client marketers that they won’t be

worse off under a Labour government: 44% disagreed that Labour would be

a threat to advertising. However, 29% still felt there was a danger from

the Labour Party, along with 27% who didn’t wish to, or couldn’t, say.



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Other media usage

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Internet               49%

CD-ROM                 23%

Video                  29%

In-store terminals     16%

DRTV                   20%

DR press               29%

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Variations in spend

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Finance (11 clients)    0%

FMCG (9)               +1%

Motor cars (6)         +3%

Retail (5)             +4%

Travel (5)             -9%

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