Shareholder pressure reshapes media sector

Times have certainly changed when 80 per cent of TV billings come through publicly quoted companies. Media buyers must get to grips with this and offer shareholders and clients alike a better service, says Jerry Hill. Jerry Hill is chief execu

Since I joined the television industry 20 years ago much has changed.

Quite correctly media has gone from the obligatory 15-minute turn at the end of the account and creative pitch, to a three-hour demonstration of arithmetical gymnastics.

TV has seen its fair share of change. Commercial TV was universally deemed effective, desirable and affordable. Its appeal increased from a seemingly endless range of advertisers whose goods and services experienced the bounty of what commercial TV advertising could deliver.

Over those years there have been some less obvious changes. The media-buying discipline became a mature sector on the stock market, where now nearly 80 per cent of billings placed on TV come through a publicly-quoted company. Business accountability grew in tandem with the mathematical complexity of the multichannel market and, to the uninitiated, it all became horribly complicated. The rather transparent and convenient method of airtime trading and the ever-increasing competition between media-buying companies provided rich oxygen to expand this market to the level of sophistication it enjoys today.

However, despite recent buying consolidation, there appear to be more buyers in the market than ever before. Buyers by habit will do all that is possible to devalue – that’s the negotiation process the world over. But we mustn’t allow this under-valuing process to undermine the medium as a whole.

The commercial TV medium today is more diverse, more dynamic and more capable of competing harder for the advertising pound than it has ever been. The potential of changing technologies and services that are likely to influence the viewer adds weight to this view. I am of the school that believes media planning and buying today is capable of sharpening or blunting the competitive edge of good creative work. The TV market continues to develop and the world of media buying has got new issues to address.

If pundits are correct in their belief that public company shareholders will play the principal part in fostering further agency consolidation, the media world faces some interesting times. It is not too difficult to imagine the market dominated by five major agency groups. With all that market data in the hands of so few, it is easy to predict the final days of cost-per-thousand discount in relation to somebody else’s average.

Some quite significant issues have recently entered the debate. Industry audience research, trading practices, the boundaries of electronic transaction and, latterly, the pros and cons of increased minutage. The question is, how prepared is the business to compete in this world?

This autumn TN/AGB will reveal the findings of the TV Span ad effectiveness study running for the past 18 months. This research, financed by TSMS and Meridian Broadcasting, will help us understand the communication effects of TV airtime by channel and time of day. It has the potential to start answering accountability questions.

It could even begin the process of dismantling the commoditised airtime market and, in time, this information may help shape broadcasters’ thinking as to the nature and type of programme schedule that would yield the best return for the advertiser, and therefore for their station’s shareholders.

This research may arrive just in time.

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