If Unilever can sell Wall’s sausages at a discount in its canteen,
then why can’t Carlton and Granada give its digital channel, ONdigital,
preferential airtime rates for its ad campaigns?
Trite though the comparison may be, it serves to illustrate the pitfalls
of cross-media ownership. It’s a problem that faces groups such as
United News & Media and News International, just as much as the ITV
stations. It’s also a problem that will not go away.
At issue, in this the latest of a number of similar public spats, is the
amount and quality of airtime bought by ONdigital in the Carlton and
Granada regions. Advertisers and agencies alike argue that such is
ONdigital’s presence in these markets that the amount of airtime
available to other advertisers has been reduced and, calculated on a
simple supply and demand formula, the cost of advertising on ITV has
subsequently gone up.
Agencies and advertisers point to the high number of prime-time slots in
ONdigital’s schedule as possible evidence that a preferential deal has
been negotiated between the digital TV company and its joint owners,
Carlton and Granada.
Their frustration is further intensified by the accusation that such
plum ad spots would not be open to them as a package on the open market.
What’s more, if ONdigital is paying a big premium on such sought-after
slots, then this pushes up the station average price and therefore hikes
rates for other advertisers.
While there is no concrete evidence to show any of this has taken place,
the accusers point to the fact that, between January and June, ONdigital
was the second-biggest advertiser in the Carlton and Granada regions
after McDonald’s. According to some estimates, ONdigital’s adspend,
combined with those of other Carlton and Granada companies, now accounts
for 3 per cent of all ITV ad revenue.
Although it is not the first time that such disputes have been waged
(last year, the Granada-owned Little Chef’s weighty presence in the
Granada region attracted the attention of the Incorporated Society of
British Advertisers), it is the timing, coming as it does on the eve of
the annual round of TV airtime negotiations, that makes this latest spat
all the more bitter. ISBA says it will seek ’reassurances’ that nothing
untoward has taken place. But short of referring Carlton and Granada to
the Independent Television Commission, there is little it can do on
behalf of advertisers in shedding any light on a subject that is
conveniently obscured by a veil of commercial secrecy.
Russell Boyman, managing partner of Mediapolis, agrees that the issue is
increasingly becoming a problem. He says: ’I think it comes down to the
trust factor. This latest episode has demonstrated that the mechanism
that we use to trade - station average price - is becoming less
If it is not transparent, then of course it’s going to raise doubt in
the minds of every person who is in the business of buying airtime.
Perhaps we are being a bit paranoid but, when you’ve got the big ITV
barons owning more than one franchise, this sort of thing is bound to
happen. So I think our paranoia is somewhat justified.’
John Blakemore, advertising director of SmithKline Beecham, believes the
effects on advertising rates of airtime being ’sucked’ out of the
schedule can only be inflationary. He says: ’I think we could see prices
being raised by as much as 4 per cent because of this.’ Although
Blakemore understands the need for confidentiality in the trading of
airtime, he does think that episodes such as this illustrate the need
for a new currency. He adds: ’I feel no more vulnerable in this
situation than in wondering what price a competitor such as Colgate is
paying for its time. I just feel suspicious, that’s all. But what this
does is illustrate once again the difficulty of coming up with a trading
currency that satisfies all parties: advertisers, agencies and media
owners. And, to date, no-one has come up with that.’
Another concern for Blakemore is that the increase in the share of
revenue - not only of ITV, but of stations such as Carlton and Granada -
could distort an advertiser’s media schedule for the forthcoming year.
Calculated on this year’s prices, advertisers would expect to pay more
money and therefore might allocate more of their budget to Carlton and
Granada than is actually necessary.
Bob Wootton, the director of media and advertising affairs at ISBA,
thinks the prime issue is not really about price. He argues: ’I think it
is highly unlikely that the stations would be offering preferential
deals, as that would be tantamount to getting caught with their hands in
the till. But it is more about the volume of inventory that is being
taken out of the market, which has a real effect on price. The actual
price of the deals might well become an issue at a later date if
suspicions that such a good schedule cannot be bought by ONdigital on
the open market are actually confirmed.’
ISBA has asked agencies and advertisers to analyse the figures to assess
whether there have been any preferential deals given to ONdigital. The
results of that investigation will determine what course of action will
be taken and a formal representation to the ITC is not being ruled
But Steve Platt, the managing director of Carlton Sales, believes the
issue has been blown out of all proportion. He categorically denies that
either ONdigital or any other Carlton-owned company has been given any
preferential treatment. He states: ’They are treated just like any other
advertiser and, if they get good quality spots, they are going to have
to pay for them just like anyone else. This was a bona fide deal and it
would be the same for any other advertiser. ONdigital’s strategy has
been to target major conurbations and that’s why you see them
advertising heavily in the Carlton and Granada regions. Had this been
any other advertiser, I don’t think we would have seen all this fuss.
Had it been McDonald’s or Procter & Gamble, would we have heard all this
noise? I don’t think so. What do they want us to do? Not allow any of
our companies to advertise on our channels - that’s ridiculous.’