MEDIA: FORUM; Why is non-spot advertising the hot topic again?

The potential of non-spot advertising opportunities is under the microscope again. Last week saw the launch of two operations designed to stimulate activity in this sector. More hype than reality? Have we heard it all before? And are broadcasters genuinely ready and willing to help develop this sector? Alasdair Reid reports

The potential of non-spot advertising opportunities is under the

microscope again. Last week saw the launch of two operations designed to

stimulate activity in this sector. More hype than reality? Have we heard

it all before? And are broadcasters genuinely ready and willing to help

develop this sector? Alasdair Reid reports

Opportunities outside conventional spot advertising are back on the

agenda in a big way. This isn’t down to a sudden flurry of sponsorship

deals, although sponsorship is sexy again - witness Cadbury’s proposed

pounds 10 million association with Coronation Street - despite last

year’s dubious downmarket flirtation between tabloids and game shows.

Sponsorship is still important, but the focus is broadening to embrace

other ways in which advertisers can become involved with programming.

Last week Laser Sales created a new commercial division to pull together

all forms of non-spot revenue across Granada, LWT, Yorkshire Tyne Tees

and Border. It will deal with sponsorship, advertisers’ co-production,

licencing and merchandising, as well as revenue spin-offs from

conventional spot advertising deals - such as sales promotion, launch

support and test marketing.

Also last week (Campaign, 2 February), Pattison Horswell Durden set up a

subsidiary called PHD BigTime to specialise in this area. PHD already

has a fair track record in sponsorship, but now it is also looking to

help advertisers devise and co-fund their own programming. Nor is this a

completely new area- it negotiated an innovative deal between Smith and

Nephew and UK Living last year which put the TV equivalent of

advertorials on UK screens.

It all sounds very impressive. But is it important? Won’t this sector

always be peripheral? After all, sponsorship has never really lived up

to all the hype. And there’s the small matter of Independent Television

Commission regulations. The rules may be more stringent for terrestrial

broadcasters than their satellite counterparts but they are certainly a

substantial barrier to the sector’s development across the board. Are

broadcasters - especially mainstream ones - really serious about non-

spot revenue?

Tess Alps, the managing director of PHD BigTime, admits that currently

there is more hype than reality in this sector. ‘The point is that it’s

important to ensure that it all develops along the right lines,’ she

explains. ‘We aim to make this develop into something that will be

respected and that serious advertisers will want to get involved in. It

is important for broadcasters, even mainstream ones. New technology will

lead to more channels but there will not be a requisite increase in

programming budgets. If TV channels don’t want to see their schedules

sink, they will have to take advertiser support for programming.’

Alps argues that it will take specialist expertise to develop the

market. ‘Deals will involve a tripartite relationship between

advertisers, programme makers and agencies - people are still getting to

grips with that,’ she says.

Martin Bowley, the managing director of Carlton UK Sales, has a slightly

different perspective. ‘I’d be much more encouraged by all this talk if

agencies had taken full advantage of the opportunities thrown up by

sponsorship,’ he states. ‘Quite frankly, this whole area has passed most

agencies by. We have the structures in place and have invested a lot of

time and money in proving the value of sponsorship. But it remains an

uphill struggle.

‘We are happy to listen to any ideas. If people want to talk to us about

co-funding, then fantastic. I have to say that we haven’t had many

conversations so far, although we have carried advertiser-supplied

programming. In this industry there’s sometimes a lemming-like rush to

be associated with anything that’s new and niche even though most

products out there are still mass-market products. This is more to do

with media companies positioning themselves. Full-service agencies

differentiate themselves on the quality of their creative departments.

Media companies are going through an evolutionary period where buying

performance isn’t a differentiator any more. What we’re seeing is media

specialists trying to find other ways to do that.’

Graham Duff, the managing director of Zenith Media, says that it’s

important to keep a sense of proportion. ‘People respect PHD - if any

other agency had made a similar announcement there would have been a

good deal more scepticism,’ he argues. ‘When people run off into

diverting new areas there’s a tendency to start believing that it’s the

most important thing around. It isn’t.

‘Advertiser expectations are that the audiences they need are there and

that their airtime is handled as efficiently as it can be. They don’t

want to see management time diverted away from their core business.

There are maybe 200 brands on TV each week - few of them will be looking

for the sort of new opportunities being talked about.

‘That’s not to say that it should be dismissed out of hand - far from

it. If added value can be brought to bear for an advertiser, then that

should be applauded. And from the broadcaster’s point of view, if

advertiser involvement can add something to a programme, they’ll

consider it. They would be stupid not to.’

Jerry Buhlmann, the managing director of BBJ Media Services, says that

there are bigger issues of broadcast revenue at stake here. ‘There has

been a move away from a reliance on advertising revenue towards a direct

reliance on the consumer through subscription,’ he maintains. ‘At its

current rate of growth, BSkyB will be taking more total revenue than ITV

by the year 2000, almost irrespective of the rate at which its

penetration grows. So ITV and Channel 4 will be under pressure to find

other sources of revenue if they want to maintain profitability. They

have little choice - they will have to embrace advertiser-supported

programming and enter into sponsorship partnerships.

‘Deregulation of this area is inevitable - the only question is the

timing - and I don’t think it will be long before broadcasters are able

to do more or less as they want. The big question though is whether this

will bring new funds into TV over and above spot advertising. That will

depend on whether sponsorship and co-productions are regarded as

effective or not and that isn’t easy to measure because advertisers tend

to have different objectives and use such routes for very different