Industry calls for advertiser watchdog after ITV merger

LONDON - Calls from the advertising industry have been made to appoint a watchdog to safeguard the interests of advertisers, should the ITV merger go ahead.

There are concerns that if the merger does go ahead with Carlton Communications and Granada retaining control of their airtime sales houses, they will drive up the costs of advertising on ITV.

To ensure this does not happen, a call supported by the Incorporated Society of British Advertisers, the voice of British advertisers, has been made to appoint an ombudsman with a good knowledge of the advertising industry.

Chris Hayward, head of TV at ZenithOptimedia, told the Sunday Express: "I would personally like to see someone with an excellent knowledge of the industry act as an ombudsman to whom advertisers and media buyers would go to if they had a concern."

If the merger goes ahead and Carlton and Granada bring their two sales arms under one roof, they will control 51% of the television advertising market.

In their defence, the two ITV companies have made several proposals to appease advertisers, one of which allows advertisers to renew share deals but based on the same favourable terms as previously agreed. This would mean advertisers would be allowed to reduce the number of ads shown, if ITV's share of viewers decreased, without losing their discounts. Share deals give advertisers discounts over a period of time if they agree to spend a certain amount of money.

The ITV companies have also proposed that a minimum amount of ITV's airtime auctioned off each year to a third party, which would then be sold to a secondary market.

However, the proposals were greeted with scepticism by key advertisers, including Procter & Gamble, and media agencies. ISBA has said the remedies did not solve any of the problems.

"There is some doubt as to whether specific technical remedies would solve the fundamental problem of the dominance in the airtime market that a single ITV would have," ISBA said.

Most big advertiser and media owners favour ITV being forced to sell off both its sales houses, which they refer to as double divestment.

Bob Wootton, the ISBA director of media and advertising affairs, said: "An ombudsman could work on top of structural changes. The right structural remedy, which might involve double divestment, would make it more difficult for ITV to find a way of circumnavigating the situation to its advantage.”

However, Michael Green, the Carlton chairman, has already said he will walk away from the merger deal if the two companies are forced to sell off their sales houses.

Last week, the ruling of the Department of Trade and Industry on the merger was delayed following the investigation by the Competition Commission.

If you have an opinion on this or any other issue raised on Brand Republic, join the debate in the Forum here.

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