Digital dilemma for advertisers

This month BSkyB will inaugurate a momentous period in British broadcasting with the launch of the first digital television channels.

True, it won’t be as momentous as BSkyB had hoped – thanks to the failure of the satellite TV company to secure a spectacular pay-per-view deal with the Premier League. But no matter: BIB (the BSkyB digital vehicle) and British Digital Broadcasting, its terrestrial counterpart, will transform the way that UK television is viewed and financed.

The important questions for advertisers is not if, but when, this transformation will occur, and how good it is for them. Central to all of this is the future of ITV as the dominant commercial channel.

The more excitable critics of ITV, exasperated by rising costs and declining audiences, would like to portray its chief executive Richard Eyre as a Quixotic King Canute who’s about to take a very big bath.

That’s unlikely, though. For the moment Eyre can say ‘waves, what waves?’ without fear of embarrassment. Marketing directors, for all their carping, have a vested interest in supporting a status quo which features one supremely strong channel. They suspect, probably rightly, that digital penetration will be slow. And, even if it were not, they would be anxious about committing a sizeable part of their budget to an untried medium which threatens to subvert all their comfortable notions about TV advertising.

But let’s look at the situation ten years from now. Almost everyone will have, or be on the verge of buying, a digital TV set. Channels will have proliferated and so will viewing choices. ITV will still be the biggest and best resourced commercial channel, probably supported by two enhanced sales houses and much reduced Treasury levies. But dominant it won’t be – not, at least, for significant parts of the day and night. A new strategy, product- rather than channel-based, will have emerged, where resources are marshalled around the high ground of peak time, leaving the lowlands to be fought over by others. ITV will, in any case, no longer be confined to a single terrestrial channel: its product will range across a number of digital brand extensions.

Fanciful perhaps – but if only a few of these assumptions come to pass, they will fundamentally change the way broadcast media is traded and tracked. Which is why the future of audience measurement and more specifically the renewal of the BARB contract in January 2002, is so important.

The present system already groans under the weight of added channels. In the new digital age it will collapse, unless more sophisticated technology is applied to viewing measurement. As Torin Douglas reveals, Taylor Nelson Sofres (AGB by another name) has already given considerable thought to the technological problems. But what of the added costs in assessing these smaller audiences? And who will bear them?

Torin Douglas, page 17; Cover Story, page 28

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