In the first quarter of 1999, there were two dotcom clients running
television campaigns. For the first quarter of next year, there are 16
What has been happening this year in the US, where the total TV spend of
e-commerce companies is likely to be dollars 1.8 billion, including
dollars 600 million in the final quarter alone, is about to happen here
- albeit on a slightly smaller scale, of course.
Last week, Steve Platt, the managing director of Carlton Sales,
predicted that the adspend of e-commerce companies will leap by a factor
of ten - from pounds 35 million this year to pounds 300 million during
This, he predicts, will further loosen ITV’s reliance on its traditional
customers - the big FMCG companies - and will accelerate the network’s
evolution, in programming terms, from a focus on slightly downmarket
audiences biased towards women, to an upmarket station chasing youngish
men. Over recent years, that shift has been apparent in its
determination to win big sporting rights and develop quality drama. That
trend looks like continuing.
There are other implications too. Because e-commerce companies are
relatively naive participants in the TV market, they tend to pay a
premium, and that could have a knock-on effect across the whole market.
In other words, FMCG advertisers will face a double whammy, because ITV
will be able to push prices up across the board and claw back discount
from its traditional customers.
’Steve would say that, wouldn’t he?’ counters John Blakemore, the UK
advertising director at SmithKline Beecham. ’I’ve actually heard it the
other way around. If dotcom clients are prepared to pay a premium
against the rest of the market, that might allow us to get more
discount. But I think it could well be true that an influx of new money
could cause an increase in the overall price of airtime. For us, finding
a response to that is an everyday battle - we’re always asking how we
can make our media investments go further so that we can flog our
’The only thing I’m surprised about is that it is happening so fast. I
was in the States over the summer and it had taken off over there, but I
had assumed that it would take 18 months to happen here.’
Is it inevitable that FMCG brands will be forced off ITV? The lessons
from the US are clear. Procter & Gamble, for instance, spends far more
than the industry average on cable TV. There’s every indication here
that FMCG companies are not just looking at cheaper TV alternatives but
also at other media.
Last week, Nestle’s director of marketing services, Philip Buckman,
revealed that his company is now the top supporter of the outdoor medium
in the UK, with a spend of pounds 15 million. TV sales bosses might
smile patronisingly at such a sum, but Nestle is not alone in seeking
ways to counter TV inflation.
Surely, though, there are huge risks involved here for ITV?
Dotcoms may be the attractive and exciting new kid on the block, but
that might not last for ever. In fact, you could argue that it’s almost
inevitable that a huge proportion of these new ventures will not survive
longer than a year or so, and there are pessimists who insist that the
whole sector will suffer a meltdown. They believe the South Sea e-bubble
just has to burst.
Platt, however, argues that he has very little choice in the matter:
’There is no question that the FMCG money dropping out is more than
being replaced by new technology advertisers. And as much as we’d like
to be loyal to our existing customer base, we can’t ignore that.
’If these guys are coming through and pay a rate for it, and make
commitments over a 12-month period, we can’t turn them down. Yes, it’s a
risk that they might be here today and gone tomorrow, but not all of
them will go under and those that survive will be big businesses.’