Everyone knows the airtime market is driven by values other than
the iron laws of supply and demand. To some extent, that’s down to the
ambiguous nature of the product itself which, depending on who you talk
to, is either a quantitatively measured commodity or a qualitative
proposition. Or both at the same time.
And then there’s the rather unhealthy relationship that advertisers and
agencies have with the dominant supplier, ITV. ITV has within its
portfolio a unique type of airtime - during peaktime it offers large
audiences that deliver massive cover in a very short time.
Buyers are so keen to buy ITV that they don’t often bother talking about
what exactly it will offer in return - they talk only of what percentage
of their budget to give the network. Then buyers and sellers across the
market get together to massage the figures so it looks as if everyone
has secured huge discounts against a measure called station average
price. Everyone in the market seems to be a winner.
ITV sells at a premium against the rest of the market and this premium
rises with impunity if ITV’s audiences decline - which they often
At this point, advertisers complain but don’t actually do anything about
it - such as shifting their money to stations showing audience
Until now, that is. Last week, the Incorporated Society of British
Advertisers decided that it would like to impose a far more austere and
exacting morality on the marketplace. It issued a memo offering guidance
to members entering the current negotiation season with television
airtime sales points.
This memo, penned by Bob Wootton, director of media and advertising
affairs for ISBA, is believed to reflect the views of a large number of
ISBA members, but is not a formal policy document. It notes that ’most
negotiations have historically tended to involve a fixed commitment in
terms of volume or share of expenditure on the advertiser’s behalf in
return for a variable delivery from the broadcaster’.
The memo suggests that share of advertiser spend given to a particular
station should be directly related to that station’s audience
performance. Share of revenue should equal share of viewing.
Can it? And what is the likelihood of ISBA members following the
Isn’t the timing a bit odd? After all, we’re already well into the
Absolutely, Martin Bowley, chief executive of Carlton UK Sales,
He has never been a fan of fixed-price trading and sees this latest
initiative as a rather gauche attempt to redistribute ITV wealth. He’s
’ITV offers more benefits and gets higher ratings than other channels so
it gets a higher price,’ he asserts. ’It reaches every nook and cranny
of this great nation of ours and has huge cover benefits. Other channels
can’t offer anything like that. The big advertisers are on ITV because
they want to appear in the highest-rating programmes on television.
We’ve long argued about ITV’s premium position in the marketplace and,
of course, we’d like to get even more of a premium.’
According to Bowley, the ISBA document implies that ITV should, ideally,
take a share of revenue that equals its share of commercial impacts.
’Put it the other way around - you’re suggesting that other channels
should take more money. You’re saying that Live TV should be taking more
Have you seen Live TV? And the problem with other trading systems is
that we’d get full quickly. It isn’t flexible enough to allow late
Lynda Graham, the managing director of Media Audits, doesn’t agree.
’Deals on the basis of guaranteed audiences and fixed prices would allow
the advertiser to win in the right sort of way,’ she argues. ’At the
moment, advertisers have to guarantee budgets and what do they get in
A discount - a minus number. Under this system the winners are the
broadcasters and agencies - because they all get discount. Advertisers
are the only ones who lose out.
’I applaud this initiative. It will put the focus back where it should
be - on the real price and value of airtime. Fixed prices would also
separate the sheep from the goats where media specialists are concerned.
Advertisers are concerned about real prices and they are focused on
inflation. Agencies don’t think like that. If advertisers start
challenging agencies about the absolute price of airtime on a
year-on-year basis it will be a step in the right direction.’
Agencies understandably take issue with this world view. And they point
out that the advertisers who want to trade fixed prices already can and
do. Chris Boothby, the head of broadcast at BBJ Media Services, points
out that the current floating price system provides a recognisable and
measurable system that advertisers have been using for years. ’While
many agencies have moved away from this trading system towards
fixed-price deals, there is still a justifiable need for clients to be
aware of their relative price position - and ITV station price provides
He adds: ’The real measure of a campaign’s performance should, of
course, involve looking at the overall communication effect of a
schedule in terms of coverage, environment, attraction levels and
absolute cost. Effective buying requires an understanding of the value
and contribution of each media opportunity in order to maximise
communication delivery. Using station price as a trading mechanism on
ITV should not adversely affect performance.’
Graham Duff, chief executive of Zenith Media, broadly endorses that
’It doesn’t mean that this is the end of the current trading system -
which is a sadly misunderstood beast. For instance, I am not aware of a
single advertiser whose whole strategy is about achieving discount.
We look at coverage and frequency and we take a number of different
spins into negotiations. This business is all about finding ways to meet
client needs and the thing about clients is that they are all different.
The main thing that advertisers want is value and ISBA is right to
remind its membership there are several factors they should consider.’