MEDIA: FORUM; Are sales houses still failing to act responsibly?

ITV sales houses are facing turbulent times once more. Yet again a major buying point is reneging on its promises and last week Laser was accused of not fulfilling its agreements. The last time market credibility was called into question, the sales points promised a trading charter. What happened to that idea?

ITV sales houses are facing turbulent times once more. Yet again a major

buying point is reneging on its promises and last week Laser was accused

of not fulfilling its agreements. The last time market credibility was

called into question, the sales points promised a trading charter. What

happened to that idea?

One day, those responsible for selling Yorkshire Tyne Tees TV’s airtime

will succeed in keeping everyone happy. YTTV, you will remember, was the

contractor that almost blew the whole ITV trading system apart four

years ago by ‘overtrading’ - effectively selling too much of its

airtime. Last week, its chairman, Ward Thomas, was complaining bitterly

that its sales house, Laser, wasn’t selling enough.

There’s more to this than meets the eye, of course - Thomas was doing

his best to convince the City that there is room for improvement in ad

revenue. YTTV could be an acquisition target in the near future

(possibly by Laser’s owner, Granada Group) and he wants to get as good a

price as possible. Many in the industry, however, have been pointing out

that YTTV’s share of the market is about right.

The timing wasn’t exactly brilliant - Thomas’s outburst isn’t the only

dent to the credibility of the ITV airtime market this autumn. Not only

is there another trading scandal brewing because some agencies aren’t

meeting their deals, but the Independent Television Commission is also

stepping back from its role as unofficial guarantor of the station

average price trading system. The ITC has implied that ITV companies are

economical with the truth when it comes to the revenue figures on which

the system depends.

The irony is that we’ve been here many times before and each time there

are promises, from both sides of the fence, that it won’t happen again.

Last year, there was even talk of the sales houses producing a trading

charter. Whatever happened to that? What happened to promises of trading

transparency? And will these latest shenanigans damage ITV as it gears

up to fight the challenge of Channel 5?

As the chief executive of Laser Sales, Mick Desmond has been caught in

the middle between broadcast clients complaining that he’s not

delivering enough revenue, and agencies who aren’t paying him what they

promised. So what is Desmond doing to improve the system?

Desmond admits there is always room for improvement, but maintains that

substantial progress has been made in the last year. ‘We now have a very

good dialogue with trade bodies representing advertisers and agencies,’

he says. ‘The sales side of commercial television has seen massive

changes in the past couple of years but all the pieces of the jigsaw

were in place last year and everyone has been getting used to the new

systems. We’ve entered a period when the sales houses have been able to

concentrate on improving the service they offer to their clients.’

But what about the promised charter for improvement? Actions, Desmond

insists, speak louder than words. ‘We feel that we have put our houses

in order as regards overtrading and there is a great deal more

transparency than there was a year ago.’

Will all these distractions benefit ITV’s competitors? Bob Wootton, the

director of media services at the Incorporated Society of British

Advertisers, doesn’t think that ITV’s problems will necessarily benefit

Channel 5. ‘There will be a honeymoon period as far as Channel 5’s sales

efforts are concerned but the honeymoon will be short - it will be

judged on performance very quickly,’ he argues. ‘And after all, ITV is

the market maker. That gives ITV certain reserves of goodwill.’

He does, however, think that a trading charter should be back on the

agenda: ‘Anything that calls into question the working of the market

creates uncertainty and the longer it goes unresolved, the more it will

fester. These are very serious issues. The marketplace realises that

these days and, I hope, is willing to act accordingly. The truth is that

even if you have ISBA and a couple of media auditors on your side, you

can’t guarantee transparency. But a charter would pour oil on these

troubled waters.’

Tim Wootton, the chief executive of TSMS, agrees that the trading system

needs to be overhauled but he points out that while people insist on

trading on station average price - and many still do - then those deals

have to be met by both buyer and seller. ‘I can only speak for TSMS, but

the way we operate is extremely transparent and we have been applauded

for that. We have improved on the administrative side immensely in the

last year,’ he maintains.

‘The thing about station average price, regrettably, is that a good

audience performance hinders revenue performance. It is also the case

that many sales executives are still rewarded on a basis of the share

they take of ITV revenue. Those people will not necessarily welcome


‘Nothing will happen until there is a consensus within ITV. No-one will

take action unilaterally because we’ve seen in the past what happens

when you do that - you get burned. But I think we’re seeing a desire for

change at the very highest levels within ITV and there is a general will

to sort things out.’

Alan James, the TV buying director of The Network, says that the current

overdealing situation is outrageous, but he doesn’t think that the sales

points have most responsibility for cleaning up the market. ‘This is an

issue for advertisers and the trade bodies representing buyers - the

Institute of Practitioners in Advertising and the Association of Media

and Communication Specialists,’ he argues. ‘If a buying company wins

business on the back of guarantees made to advertisers in pitches and

those guarantees can’t be met without overtrading, then they are doing

the whole market a disservice. They cannot be allowed to get away with


‘Equally, clients have to take some of the responsibility. I have yet to

hear of a client that has fired its buying agency for malpractice of

this sort. And we all know of instances where an advertiser has

appointed a buying agency on the basis of pitch promises that everyone

knows just can’t be met. Clients have to take a longer term view than

they have - in many cases they’re still just trying to please the board,

and ultimately the City, with ill-conceived short-term cost-cutting

measures. It seems to me that we are still in a vicious circle that no-

one seems prepared to break.’


Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus