Close-Up: Prepare for another tough year, ISBA conference hears

Maisie McCabe learns of the challenges facing the industry in 2011.

The annual conference of ISBA, the advertisers' association, tends to draw a significant haul of execs - both marketers looking for insight and agencies and media owners on the lookout for new clients.

This year was no exception, with 280 delegates descending on Lord's Cricket Ground to listen to industry chiefs such as Mark Hunter from Molson Coors, Nick Fox from DDB, Mike Darcey from BSkyB, Fru Hazlitt from ITV, Ed Richards from Ofcom, Guy Parker from the Advertising Standards Authority and ISBA's own Mike Hughes.

So there was a lot of talking. Here's the learning.

Uncertainty is the only certainty

No-one really knows what impact the Government's public-sector cuts and the duality of media fragmentation and convergence will have on media, marketing and advertising. In an interestingly partisan opener, Hughes, ISBA's director-general, told the industry to prepare for a "rocky year ahead".

The ad industry needs to defend itself better

When "lazy politicians" are looking for someone or something to blame, advertising is seen an easy target. The former ITV executive Steve Hewlett said the industry needs to be more "on the front foot" to make sure it handles this criticism more effectively.

Hunter, the chief executive of Molson Coors and ISBA president, said the recent advertising code review, which focused on the protection of children, was "inflamed by confusion between products and advertising", saying the problem with the widely criticised children's padded bra was that it existed, not that it was advertised.

There's going to be another review of TV advertising

In the past year, everyone has had their say on how TV airtime should be traded. Despite last year's Competition Commission ruling that Contract Rights Renewal, the regulations governing how ITV airtime is traded, should stay, the House of Lords recommended in February that CRR should go, after all.

Even though Ofcom, the media regulator, ruled out a market review in July last year, it has stepped back into the fray. Richards, its chief executive, used his speech to announce that Ofcom's view has changed and it will now consider whether the way broadcasters sell TV advertising "prevents, distorts or restricts" competition.

The ASA seeks a more collaborative approach

The ASA expanded its remit on 1 March to include company websites and other non-paid-for spaces online. Parker, its chief executive, said the move is an example of the "Big Society" in action. Next on the organisation's agenda is a push to increase mediation to help resolve complaints earlier in the process, without the need for a formal judgment, and to involve the "experts" from Clearcast sooner.

Pay-TV broadcasters need advertising

Even though advertising accounts for less than 10 per cent of Sky's revenue, it is a disproportionately profitable part of the business. In fact, in 2010, more than one-third of Sky's operating profits came from ad revenue. Darcey, its chief operating officer, said that ad revenue is "absolutely integral" to the economics of investing in the quality content that he says Sky's business revolves around.

Broadcasters and TV service providers are one big happy family

A panel session on connected TV showed that the different parties, including platform, broadcaster and agency, want to work together. Hazlitt, ITV's managing director of commercial and online, said collaboration between platforms and broadcasters is "the way forward" and dismissed suggestions that ITV fails to benefit from Facebook.

How long will TV reign?

Three 16-year-olds told delegates they consume most media through a computer rather than a TV. The voices of the next generation explained how they don't think about the consequences of illegally viewing content online, only ever pay to download music if they can't find it on LimeWire and see the box in the front room as something you only watch as a family. They are never far away from a screen connected to Facebook, use Formspring rather than Twitter and, happily for the Radio Advertising Bureau, are big fans of Capital FM and Kiss.

Convergence is a complicated business, even if everyone is keen

When Virgin Media looked to integrate its creative, digital and direct accounts, it wanted an agency that would provide its multi-platform products with a seamless service across all media. In a joint presentation, Virgin Media and its ad agency, DDB UK, explained how they have tried to navigate the complications. Fox, DDB's chief client officer, said the key to convergence is to be "actively open" and accept that a great idea can come from anywhere. He warned that agencies need to ensure disciplines have been "brought together before you crash them together".

The pitch process needs to improve

Research from ISBA and the IPA suggests that only 8 per cent of clients rate pitching as an efficient process, and there is a huge disparity in how much advertisers and agencies estimate it to cost: the former suggesting around £31,000, with the latter as much as £178,000.