Media Forum: Is ITV's sales focus right?

Its old guard cull saw ITV vow to be more client focused.

ITV hasn't been a unified public limited company for a whole decade yet but already it has a distinguished history when it comes to trying to foster more grown-up relationships with advertisers.

In 2004, the network's sales boss Graham Duff appointed Justin Sampson to the role of director of customer relationship marketing - and Sampson promptly recruited an able lieutenant in the form of Mark Trinder, who became the head of advertising solutions.

Later, when the commercial director Ian McCulloch and the sales boss Gary Digby ruled the roost, the role of evolving adult conversations with clients was taken by Nicky Buss. And under a more recent regime headed by the executive chairman, Michael Grade, a "transformational" initiative saw Rupert Howell drafted in to fulfil a new commercial role including a brief to schmooze senior clients.

And on two occasions, the notion that ITV should do more to foster deeper relationships with advertisers has been central to the deliberations of well-paid consultants: The Foundation in 2004 and Boston Consulting Group in 2008.

Last week, it was Fru Hazlitt's turn to venture a chapter in this noble tradition. The City has been waiting patiently for Hazlitt (who succeeded Howell in June 2010) to make all sorts of suitably appropriate noises about the rapidly evolving media landscape (after all, she previously worked at Yahoo!). And noises, too, about diversifying ITV's future revenue streams.

Last week, in melodramatic fashion, she made them. First, she sacked most of ITV's old guard and unveiled Kelly Williams as its sales boss. Then she outlined a new mission statement. She defaulted to lots of business admin waffle but media agencies will note in particular her promise that ITV will become more "client obsessed".

She added: "We need to add value by giving all clients many more opportunities to promote their brands using a multitude of other media as we unlock the real potential we have within ITV across multiple platforms."

The constructive sales theory has always been sound - especially for the TV market's nimbler challenger brands. But ITV's big-picture relationships with advertisers and agencies tend to be coloured by the fact that its core airtime product is consistently over-demanded.

Is Hazlitt being naive in assuming she can succeed where so many of her predecessors failed? Richard Brooke, Unilever's communications buying manager, doesn't think so. He says: "Businesses have always been successful when they listen to their customers, and provide them with what they want. In ITV's case, this stems from its programmes and the successes of 2010 seem to indicate that it has found a winning formula, delivering a product that people want to watch.

"What is critical for now is how it capitalises on that. Over the past few years, we have heard much from ITV about working with the advertising community and about a more customer-centric approach. Success will lie in whether it has identified the right way to give its customers what they want."

But can agencies change their outlook to accommodate Hazlitt's vision? Chris Hayward, the head of investment at ZenithOptimedia, argues that they can, not least because ITV is making the structural changes that will help make this work. He adds: "ITV has attempted this in the past - but it's tended to be in a less transparent way. Agencies have been suspicious about this. Now, there's a genuine opportunity for agencies to be involved without being afraid that their position is being undermined."

Much of that is echoed by Phil Georgiadis, the chairman of Walker Media: "Previous structural reorganisations were instigated by consultants - not the ITV management team itself. ITV is the market leader, so it should seek to lead the market in terms of thinking. It should also work hard on all sources of revenue, however big or small. If the objective is to increase its focus on what are currently small revenue streams, thus creating a more lasting commitment, then I support it - though it's also true that spot revenues will continue to be its dominant source of income."

And Tracy De Groose, Carat's managing director, argues that it's the right move - but the devil will be in the detail. "It will be interesting to see what changes ITV is planning and what it means by partnerships. There is still potential for the spot market to grow significantly in this country. Clearly a very small proportionate uplift in this area would deliver much more money to ITV than a much bigger proportionate uplift in non-spot."

YES - Richard Brooke, comms buying manager, Unilever

"Anything that helps advertisers unlock the potential of programme brands such as Downton Abbey should be welcome. As always, success will lie in whether it has identified the right way to give customers what they want."

YES - Chris Hayward, head of investment, ZenithOptimedia

"We have no problem with moving away from adversarial relationships. That shouldn't affect our ability to negotiate. Our experience is that a good trading relationship can enhance the prospects for collaboration."

MAYBE - Phil Georgiadis, chairman, Walker Media

"ITV should seek to lead the market in terms of thinking. That said, while Contract Rights Renewal remains in place and while group agency trading is the prevailing investment mechanic, ITV will have to stay pragmatic if it is to maintain its success."

YES - Tracy De Groose, managing director, Carat

"Partnerships are important but ITV should also make sure it doesn't pursue the new at the expense of the old. Online revenues are £20 million and sponsorship revenues are £70 million. Spot is about £2 billion."

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