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
