NEWS: ITV poised to rejig trading system

Top ITV executives have held secret talks to try to hammer out a new way of trading TV airtime. The discussions come in the wake of increasing competition for ad revenue from other channels and debt problems with agencies.

Top ITV executives have held secret talks to try to hammer out a new way

of trading TV airtime. The discussions come in the wake of increasing

competition for ad revenue from other channels and debt problems with

agencies.



Currently, most TV deals are negotiated on the basis of the share of

total ITV spend which is committed to an individual ITV sales house.



Many ITV companies now believe that such a trading system means more

money flowing out of ITV to other channels, and have called for a shift

towards rewarding advertisers for the volume of money they spend, rather

than the share of budget.



However, insiders say a row is brewing because not all ITV companies are

happy to go along with the proposals. One source said: ‘Some people in

ITV refuse to look further ahead than the next couple of years. They

personally are bonused on the share of ITV revenue they win and are not

worried that this is eroding future revenue potential.’



Share-of-ITV negotiations also force some media buyers to stretch their

deals beyond what is achievable, leaving agencies struggling to meet

commitments to sales houses.



Many now believe that share deals should be negotiated on the basis of a

share of all TV spend, rather than share of ITV expenditure. The aim is

to get a new trading system off the ground in preparation for the 1998

airtime negotiations.



Meanwhile, CIA Medianetwork is understood to have until the end of the

week to find a solution to its on-going dispute with Laser Sales over

its airtime deal. If a solution is not found, legal action could be

taken.



Feature, p28



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