ITV needs killer instinct to win the ratings war

The increasing penetration of cable and satellite, plus the news last week that the BBC won a matched share of audience, is seeing ITV beset, particularly as its ad revenue is down. Paul McCann finds out if the channel has any tricks up its sleeve to win back supremacy in an increasingly crowded market

You have to feel sorry for ITV. Its trade marketing campaign – using “killer facts” about ITV’s audience size – was launched the very week that figures from BARB showed its April audience share was at an all-Nineties low (MW last week). Then came the news that BBC1’s share of audience in the week ending May 12 matched the network’s for the first time in four years.

ITV’s bad publicity coincided with the beginning of its 5m consumer marketing push, which at least allows it to claim it has got the situation in hand. In response to a similar ratings slump last year, ITV invested more in programming, their ratings had picked up and they’d earmarked the marketing money – and then ad revenue dried up.

“We did everything they asked us to do,” says one head of an ITV sales house. “And then they decided not to support us.”

In the first quarter of this year, the dearth of advertising revenue has continued. After Procter & Gamble slashed its budget, the lack of advertisers interested in using ITV’s daytime output prompted the sales houses to co-ordinate the marketing of children’s airtime.

In March, ITV’s revenue increased by two per cent, the market as a whole was up four per cent year-on-year and Channel 4 was up 12 per cent. It is cold comfort for ITV, but the slowdown in its revenue growth at least means the network will suffer fewer complaints about its inflation than it did last year.

The traditional ITV response to concerns about its audience decline is that it is still far and away the biggest supplier of commercial audiences in the UK, and the decline is inevitable given the increasing penetration of satellite and cable.

This is, of course, all true – hence the “killer facts” – and matters are going to get worse with the advent of Channel 5 and digital TV in 1997.

The first quarter of the year was a landmark period for cable and satellite. Commercial viewing across the period only grew because of a 30 per cent increase in commercial impacts – viewing of ads – on cable and satellite.

Also in that period, cable and satellite crossed the psychologically important ten per cent share of viewing for a week. This coincided with a dip in Channel 4’s ratings and allowed the cable and satellite sector to claim to be the second largest supplier of commercial audiences, for a week.

On some broad audiences, such as 16 to 34-year-old men, cable and satellite stations already supply more impacts than Channel 4. Bill Barker, J Walter Thompson’s broadcast director, believes that in the next 18 months cable and satellite will overtake Channel 4 on almost every demographic grouping.

He says: “Channel 4 had a turbulent first quarter this year, but with continuing revenue success this year, no shareholders to answer to and the prospect of the revenue they currently give to ITV being reinvested into programming for 1998, Channel 4 should come out of the ratings battle relatively unscathed.”

But while the success of multichannel TV accounts for some of ITV’s audience decline, it does not account for the current loss of viewers to the BBC.

BBC1 took its highest share of audience across the first quarter of 1996 since the first quarter of 1993 – 32.8 per cent – and BBC2 has had a consistently good share since the second quarter of last year – over 11 per cent of individuals viewing.

The announcement of BBC1’s parity with ITV crowned a good week for the BBC, coinciding with the news that BBC radio’s share overtook commercial radio for the first time in two years. But before the BBC crows too much about its superior programming, it must be remembered that its strong week included the FA Cup final, a 20 year-old comedy show – The Best of The Two Ronnies – and The Liver Birds, a 20 year-old idea. So it has little room to get superior about ITV’s programming, especially as the National Lottery continues to be one of its top five programmes.

“This is just what happened last year and ITV sorted itself out,” says Simon Cox, broadcast director at CIA Medianetwork. “I’m sure it’s just a matter of tweaking the schedule, not a long-term problem. Everyone kicks ITV because it’s the big supplier, so its ratings affect everyone.”

But the ratings war has an extra dynamic to it this year that didn’t exist in 1995. Next year’s airtime deals will not only be based on the audience shares achieved this year – they will also be affected by competition from Channel 5. Agencies will use Channel 5 to bash anyone who lets them down this year.

Clearly, the best way to protect your station from Channel 5 is to get your ratings right this year.