Research finds high costs to blame for fall in FMCG ads

The competition from cash-rich technology, telecoms and business-to-business advertisers is pricing FMCG advertisers out of TV and forcing them into other mediums, according to a report by The Billett Consultancy.

The competition from cash-rich technology, telecoms and

business-to-business advertisers is pricing FMCG advertisers out of TV

and forcing them into other mediums, according to a report by The

Billett Consultancy.



John Billett, chairman of The Billett Consultancy, said the anxiety of

TV channels to produce programmes that attract lucrative technology,

telecoms and business-to-business advertisers has been at the expense of

shows for housewives, the staple audience for FMCG advertisers.



He also blames the higher cost of advertising on rising production and

airtime costs.



Billett said: ’TV companies are accepting high technology advertising

and charging premiums for it, and are flaunting themselves around new

technology advertisers, which will not last for ever.



’If TV stations were able to maintain their appeal to housewives, and

the price was not elevated, it would be easier for FMCG brands to retain

their presence.’



He suggested that FMCG advertisers should adopt a multi-media approach

to maintain value for money.



Billett points to the significant decline in FMCG’s share of advertising

during 1995 to 1999. The report says that, as a portion of advertising

expenditure, it has been reduced from 27 per cent to 21 per cent,

compared with a 3 per cent decline in expenditure across all mediums

during the same period.



In the past five years, 125 food brands have stopped using TV. Outdoor

and press have been the main benefactors from this displaced TV

spend.



TV companies, however, hit back at Billett’s suggestions that they were

neglecting the needs of FMCG advertisers.



Steve Platt, managing director of Carlton Sales, said: ’FMCG expenditure

on ITV is continuing to decline, so of course, we are not as reliant as

we once were on the categories, but they are still important to us.’



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