Strange things happen to the advertising market in the vicinity of a World Cup. In pure TV terms, it offers a unique festival of intense must-see events - and, consequently, it looms large in the minds of strategic planners.
The outcome is far from predictable, however. Some brands just have to be on air during the tournament and they funnel the whole year's budget towards this point; but equally, some brands you'd expect to be there just don't turn up at all, feeling they get better cut-through value by coming on air after the tournament is finished.
In general, a World Cup year is usually good for TV revenues but the picture on a month-by-month basis can be volatile, to say the least.
That, at least, is what TV sales bosses will point to as one of the factors underlying the market's current weakness. According to agency forecasts, revenue for the first quarter of 2006 is likely to be down by more than 6 per cent year on year. Predictably, given its poor audience performance, ITV1 is the worst casualty, down by more than 13 per cent year on year; but less predictable is the plight of Channel 4. Many had expected it to be the main beneficiary of ITV1's woes but it is likely to perform worse than the market average, slipping 8 per cent.
Is the slowdown attributable to budgets being kept back for the World Cup? Or are there more worrying underlying trends at work here?
Andy Barnes, the sales director at Channel 4, says the market is actually in fantastic shape when you appreciate the real underlying trends. He explains: "Last year was phenomenal, up more than 20 per cent year on year, so even though the first quarter is down you can still argue we're showing double-digit growth across two years. That is a tremendous performance by any reckoning. Am I surprised about the first quarter being down? No, not at all. And the second quarter should see an improvement in performance."
Barnes adds that the World Cup should provide stimulus for the commercial TV market as a whole. Steve Huddleston, the head of media at BT, agrees that might be so - BT certainly doesn't intend to avoid the tournament, he can reveal. He argues, however, that fluctuations between supply and demand will continue to be unpredictable.
"When the market is down, especially given that the smaller channels peg their prices to ITV's, then it can have implications for perceived value and the ability of those smaller channels to deliver. Also, the implication is that, all other things being equal, you're getting airtime 6 per cent cheaper. I wish it meant, for instance, that we've sold 6 per cent more broadband lines. That doesn't always follow. It does, however, mean that there's perhaps more reason to go on to TV - if for all the wrong reasons. But with the sort of scrutiny that all big advertisers are under (from procurement executives), it can be difficult these days to make the case for spending more money."
And Mark Craze, the managing partner of Media Planning Group, points out that the whole media market is tough. "Revenues are not strong in the national newspapers, for instance," he points out. "You might find that the market as a whole is down by more than 6 per cent and that TV is actually doing well. TV is still an incredibly powerful medium but it's going through a period of evolution, with media owners looking at how they extend their franchise and do things differently. TV companies have been setting up teams to sell opportunities beyond spot, just as print owners have been selling opportunities over and above pages."
But he also points out that advertisers are considering a whole range of non-traditional communications channels these days. If budgets are static, that has to be a worry for the TV medium.
Chris Hayward, the head of broadcast at ZenithOptimedia, concurs. "The rollercoaster sales graphs once typical in the TV market are a thing of the past," he says. There are smoothing factors at work - and that, he argues, is no bad thing. He concludes: "The first quarter of last year was exceptional. Government spending was up with an imminent election in mind and Easter was in March. I don't think anyone can complain that this year has failed to match that. But, in general, I think we've seen the last of double-digital increases in TV spend. In the future, when we see growth it will be relatively small - certainly less than 5 per cent."
NO - Andy Barnes, sales director, Channel 4
"We're being compared with a very strong 2005, so although you always want more, I'm relatively content about where we are overall. I think you also look at other media - and as far as I can see, the press and outdoor sectors are not doing well. I don't think that anyone in TV is either upset or surprised about where we are currently."
MAYBE - Steve Huddleston, head of media, BT
"(Internal) scrutiny of our media spend is increasing. So if those pressures are replicated across the market, then that will undoubtedly make it more difficult for people to spend money. But we're predicting that the summer will be strong for the TV market. By no means do we intend to avoid the World Cup."
YES - Mark Craze, managing partner, Media Planning Group
"It's still a powerful medium but you have to look at the fact that advertisers are taking other opportunities more seriously. If budgets are broadly static that means that money will be coming out of traditional media. For a long time the market has been talking about communications solutions - now it is starting to happen."
YES - Chris Hayward, head of broadcast, ZenithOptimedia
"I think in the past people made a connection between large increases in TV spend and general economic vitality. Attitudes on all sides of the market have changed - and that means that the TV sales houses can no longer assume that they just have to turn up and the money will come in the door. Those days are well and truly gone."
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