Media Forum: Can the industry change BBC funding?

Should the ad industry be more aggressive in its contribution to the BBC Charter renewal debate?

By and large, the advertising industry has punched well below its weight where reform of the BBC is concerned. The corporation eats advertisers' lunch (in taking millions of impacts out of the commercial economy, the very existence of the BBC makes the UK one of the most expensive places in the world to run ad campaigns) and they very rarely complain.

Aside from periods where they believe the political tide is running their way (for instance, during the latter half of the Thatcher era), they tend to regard the issue as a potential public relations minefield. And they tend to be encouraged in their caution by advertising agencies that fear the upheaval that would occur if major surgery were to be performed on the corporation.

Also, media agencies know that if the cost of TV advertising were to fall, so would their revenues.

This time, though, many commentators believed that things might be different.

The Department of Culture, Media and Sport has begun consultations as it begins to set parameters for the renewal of the BBC's Charter, due in 2006. In the wake of the Hutton Inquiry, here was surely an opportunity to advocate not just short-term measures to "put the BBC back in its box" but to propose more radical long-term solutions to the BBC problem.

So, many observers will be disappointed by the document drawn up recently by the IPA as its contribution to this consultation. It hopes, for instance, that giving Ofcom more direct regulatory control of the BBC can rein in the corporation from the worst abuses of its public service remit. But it also states that "any proposal to break up the corporation (would be) simplistic and retrograde".

It also gives its continued approval to the licence fee as the BBC's principal funding mode and adds: "The IPA believes that there is insufficient money in the market to support both the BBC and the current commercial operators and that any moves in this direction should be fiercely resisted."

Shouldn't the advertising industry be more aggressive in its contribution to this debate? Mark Palmer, the executive head of strategy at OMD UK, doesn't think so. He states: "People think there are easy answers but the fact remains that if you put advertising on to the BBC there will be no extra money in the market so it will have to come from somewhere.

So, on the one hand you would have the BBC worrying even more than it already does about ratings and cost per thousands. We want it to step away from all of that. Meanwhile at ITV, its revenue will be down, so how does it keep profits up? It cuts costs. It will be like anywhere else in the world: no-one will care about quality."

Antony Young, the chief executive of ZenithOptimedia UK, isn't so sure.

He states: "I support the licence fee because of all the taxes that people pay, you get most value for your money - in contrast to things such as education and health. But I disagree with the proposition that the BBC should have a monopoly on licence fee money - it should also be accessible to major commercial broadcasters. The quid pro quo is that the BBC should be able to take limited advertising, allowing it to be as commercial as it needs to be - which will be no problem because it is very commercial already in its outlook. In New Zealand, we all grew up watching EastEnders with ads in and no-one had any problem with that."

Chris Boothby, the operations director at Vizeum, can't see it - he argues that the mixed-funding model would just be far too hard to manage. "But if you opened up the existing BBC audience to advertising, the industry's infrastructure just wouldn't cope. That would affect our ability to maximise our communications. I'm not convinced that lost revenue could be replaced by a public service broadcasting fund."

Does this sort of caution disappoint advertisers? After all, they have been vocal on this issue in the past - and surely have the political clout to make BBC funding a big issue once more. Bernard Balderston, the associate director of UK Media at Procter & Gamble, argues that caution continues to be the most sensible approach.

He states: "We are aware that, if the BBC took advertising, it would radically change the nature of the broadcasting economy in the UK because there would not be enough revenue to go around. Also, we have to be aware that in the past, people who have argued even for relatively small changes in BBC funding have had no success. So it is right that at this stage the focus should be on making the BBC less ambitious - but we are aware that that too is problematical."

"The BBC sets the bar and if, as a competitor, you don't get your act together you lose audience. I'd prefer to find a way to make the BBC do more to extend choice and I certainly wouldn't want to be responsible for giving my kids rubbish TV."

MARK PALMER executive head of strategy, OMD UK

"If the BBC took advertising it would make television more accessible and cheaper for advertisers. That would be good for competition. I think the IPA view is motivated by worries about the extent to which lower television costs would impact on our business."

ANTONY YOUNG chief executive, ZenithOptimedia UK

"If we had advertising on the BBC, the market would just implode because there is just not enough revenue to go around, so the likes of ITV, which remains our main commercial broadcaster, would not be able to fund its programming to the same degree."

CHRIS BOOTHBY operations director, Vizeum

"We are at an early stage here and we don't yet know what government thinking is likely to be. If they are prepared to consider alternative funding options we, as an industry, will become more focused on developing advertising as one of those options."

BERNARD BALDERSTON associate director, UK Media, P&G.


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