Why ad-funded TV is kept off-air

If advertiser-supplied programming boosts cash-strapped broadcasters’ budgets, why is there only one such show on TV? asks Stephanie Bentley.

Advertiser-supplied programming is often hailed as the next big thing in British television. Repeatedly industry observers tell us that with more channels needing more programmes, on top of the spiralling costs of talent and sports and film rights, a gap is beginning to open up between the broadcaster’s programme budget and the amount of money it needs to provide a comprehensive schedule.

The advertiser can fill this gap, stumping up cash from its advertising budget towards the production of a programme which appeals to an audience – usually youth – that might be hard to reach. In return it might get airtime, a reduction on the price of sponsorship bumpers and the rights to sell the programme overseas.

It sounds like an obvious solution. But for a range of reasons, advertiser-funded programmes have so far failed to make much headway. There is currently only one programme on British terrestrial TV known to be funded by an advertiser – The Pepsi Chart, on Channel 5.

Simon Wells, head of advertiser-related programming of Gem, the commercial exploitation arm of GMG Endemol Entertainment, says: “Most of the time it’s more appropriate to do sponsorship because it is far more difficult to get an advertiser-funded programme on air.”

As for ITV, it is still virtually impossible to get an advertiser-supplied programme onto the schedule. David Liddiment, ITV’s director of programmes, with a budget of about £700m, says: “We have a meritocracy here and none of the advertiser-supplied programmes have yet managed to get through to the final commissioning stage.”

Even Nick Milligan, sales director of Channel 5, which has been more receptive to the idea of advertiser-supplied programming stretching its smaller £110m budget, says: “There is a lack of creative ideas.”

But disgruntled independent producers complain that ITV favours advertiser-funded programmes made by the production houses of its own shareholders, such as Granada or London Weekend Television. On the whole the terrestrial stations, particularly ITV, are so cash-rich that there is no urgency to consider this alternative form of cut-price programme supply.

Observers say that the terrestrial TV sales houses are arrogant about the existing demand for spot advertising, and remain defensive about bartering their airtime in exchange for a programme. So their call for advertiser-supplied programming has fallen on deaf ears.

Yet Martin Bowley, chief executive of Carlton Sales, insists: “If anyone could come up with a brilliant idea for a programme, it would be considered.”

Broadcasters are also understandably nervous about infringing the sponsorship code of their watchdog, the Independent Television Commission (ITC), and risking bad publicity or even a fine.

But an ITC spokeswoman denies that advertiser-supplied programming is scarce because its sponsorship and programming codes are too strict. These codes – which cover any programme which an advertiser has funded “for a promotional rather than solely for an investment purpose” – ban product placement and “undue prominence” of a product.

Some advertiser-supplied funding may not be immediately obvious of course. Most brand owners want to associate their product visibly with their TV programme, either through sponsorship or in the title but there may be occasions when the brand owner is reluctant to broadcast its involvement in a production. Advertisers are sensitive to consumer suspicion that they are interfering in programming. They may also believe they have a competitive advantage over their rivals by remaining silent.

Furthermore, their prime motivation may not be straightforward branding. Procter & Gamble has made multimillion dollar investments with US studios to encourage the making of hit shows that attract large audiences for its ads. In exchange for these programmes, P&G gets precious airtime and would actually argue that it is safeguarding programme standards.

Wells, who together with Initiative Media recently brokered a Unilever-funded music show for Channel 4 called the Lynx Voodoo Eclipse (MW July 8), says some of the best advertiser-supplied deals are those which are part of a whole communication strategy. He cites The Pepsi Chart, which was made by sister GMG Endemol company Initial, where the brand’s association with music is a unifying thread into off-air PR, promotions and merchandise. The Pepsi Chart has already been exported to markets as far afield as Hungary, Denmark and Saudi Arabia.

Malcolm Grant, chief executive of MGA Broadcasting, says advertiser-supplied programming will always work best for a small group of major advertisers which can exploit a programme across many markets.

“The bigger and more global the advertiser, the more benefits there are. Advertiser-supplied programming is time-consuming and it takes a lot of hard work, but it can be well worth the effort because the benefits are long term.”

Yet the breakthrough for advertiser-supplied programmes, out of late-night and daytime slots, or off small satellite and cable channels into peaktime terrestrial TV still looks a long way off.

Mick Brown, managing director of creative and production resource The Beach, who recently produced a series of one-minute TV shows for PricewaterhouseCoopers, says: “You have to get the programme director, the TV sales director and the client to say yes in an environment where the advertising agencies are essentially hostile to programmes as a form of communication. It’s just too complicated.”

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