Media Perspective: Grade's wavering on phone scandal may cost ITV advertisers

Michael Grade's honeymoon period at ITV is most definitely over. Last weekend he was hit with a flurry of savage criticism following ITV's unveiling of the Deloitte review into the broadcaster's management of premium rate interactive services.

Part of the savaging related to ITV's misdemeanours after Deloitte, which was commissioned by ITV to investigate identified incidents across several programmes, which will see ITV return £7.8 million to viewers.

The larger part of the criticism, and not just from the Murdoch papers, but from viewers and more measured observers, was reserved for Grade's seemingly supine handling of the findings. Having, back in August, promised "zero tolerance" from ITV on the issue and criticising some elements of the TV industry for exhibiting "casual contempt", here was Grade saying there would be no sackings and that "individuals were motivated by their professional instinct to produce the best show".

Maybe, but other indiv-iduals, members of the view-ing public, were ripped off in a series of episodes described by Grade as a "shambles". If the axe doesn't fall some-where (reports allude to an ITV director whose bonus depended on revenue from premium phone-ins), then it's hard to see this scandal going away. An apology and the return of cash to the public will not restore trust, and neither will any action taken by Ofcom and, potentially, the Serious Fraud Office (which is already investigating similar antics over at GMTV).

Up until last week, it seemed that the wave of phone-in scandals would have little effect on the sales teams of the broadcasters. However, despite some excellent recent programming successes (with ITV Sport looming large), ITV is going into the trading season under a cloud.

While it's usually hard to break out the violins for ITV's commercial team, it must be wondering if it will ever have a healthy environment in which to make deals, as it's clear that major advertisers are hacked off over the phone-in scandals. "No advertiser can be happy that a major TV station appears to have been misleading the public," Bernard Balderston, the associate director at Procter & Gamble, said last week.

The worrying point for advertisers, despite Grade being clear about a big move away from the arrogant old ITV and some progress in recent months, is that ITV still doesn't seem to have a clue how to treat its customers. ITV is adamant that the Deloitte evidence rules out any suggestion of criminal behaviour, but if it misleads viewers and then so easily shrugs off its behaviour as "cultural failing", then clients might be forgiven for thinking: is it really capable of dealing competently with the revenues and reputations of its advertisers?

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