Why clients are switching off TV
The decision by marketing executives working on a second-tier P&G brand to plough the whole of its television advertising budget into sponsorship may not appear intimately connected with the proposed &£7.8bn United/Carlton merger.
But appearances, as we know, can be deceptive. The initiatives are two sides of the same coin and signal a step-change in the industry.
Undoubtedly, there was a sound specific reason why the Wash & Go brand signed up to the Premier League. Much of its target market are young men – sports mad perhaps, but not great viewers of television.
That does not change the fact that Wash & Go is also one of a growing band of brands, especially in the packaged goods sectors, which are deserting television advertising because it is deemed too expensive, too inefficient, or both.
The exodus is being spearheaded by some of the biggest advertisers. Both P&G and Unilever (and they don’t come much bigger) have clearly focused strategies whose effect will be to channel more marketing resources into fewer brands – broadly those with the greatest global or regional reach. Which is not to say that either will cease to be a major TV advertiser; quite the contrary. But, in their efforts to cut out waste, they will become still more ruthless in negotiation. Any brand which does not make the global cut, meanwhile, will be retired or perhaps redirected into other media. Outdoor and radio are already benefiting from the effect.
Naturally, these developments have not gone unnoted by the prime advertising medium, ITV. And now, with the proposed merger of two of its biggest constituent companies, it has raised the game by producing its own inimitable solution.
The Carlton and United deal could, in principle, be good news for advertisers. It could bring greater focus to the ITV brand, protect it from foreign interlopers, accelerate the introduction of digital television and, by bolstering programming resources, potentially create more compelling viewing. More viewers, of course, should sort out the vexed issue of media inflation…
Alas, most advertisers will have none of this. Instead of enhanced value, they see reduced choice, in the sales operation they will deal with. Few are convinced that Carlton Sales and TSMS can remain separate entities once their parent companies have been fused. Somehow a vine would always creep over the Chinese wall, however carefully constructed. In any case, the deal would probably prove highly unstable, creating an unstoppable momentum towards a single sales house embracing Granada Sales. And the prospect of a sales monopoly governing ITV would be as welcome to advertisers as Christmas to the proverbial turkey.
These points will no doubt be made forcibly by top advertisers and their trade body representatives in what promises to be a highly charged meeting with United’s Lord Hollick and his lieutenants later this week. But the longer term impact of the United/Carlton proposal, whether or not it goes through in its present form, will be to catalyse irreversible changes in the way both advertisers and ITV conduct their business.
