The closure of airtime sales house TSMS which will follow Granada’s takeover of United News & Media in September brings to life the advertisers’ great nightmare.
After eight months of campaigning against consolidation among ITV’s owners, advertisers will have to come to terms with the new reality.
At a stroke it takes out one of the media agencies’ main bargaining chips when negotiating airtime sales deals for ITV. By playing one sales house off against another – TSMS, Granada and Carlton – the advertisers had some clout in negotiations.
But all of a sudden advertisers have begun to look for anything positive they can take from the new situation – they have no choice.
Trade body the Incorporated Society of British Advertisers, which has been vociferous in its opposition to consolidation, has “welcomed the swift progress being made towards the resolution of ITV ownership.”
But New PHD television director Paul Parasher says: “Now we will get down to the nitty gritty.”
He says there is an opportunity for ITV to focus on its core job of selling airtime. “Rather than the companies undercutting each other – this gives the opportunity to refocus.”
He adds: “We will only know by Christmas Eve if there has been a massive shift in power to ITV.”
He says the industry will now start looking for ways to make the two pronged ITV sales operation work in their favour. This could be through offering advice to help sales houses on areas such as Internet and interactive strategies.
But the demise of TSMS will also put pressure on buying agencies to pool their resources when confronting the ITV sales machine and some predict it could speed media agency consolidation.
The seven major airtime sales points in the UK are destined to be consolidated further. Channel 4, Channel 5 and Sky will all be looking at combinations for merging their sales teams, cutting costs and in the process reducing choice for the nation’s brand advertisers.
The announcement last week of Granada’s purchase of United’s ITV franchises Meridian, Anglia and HTV for &£1.75bn, put an end to eight months of speculation on the future ownership of ITV – for the next two to five years, at least. It puts Granada in the driving seat for eventual total control of ITV.
Last week’s deal has to be ratified by shareholders in September, after which the task of closing TSMS’s Hangar Lane HQ will begin. It forms part of the promised &£39m in savings from the deal. HTV will be sold off.
TSMS’s independent sales contracts with Ulster TV and SMG’s Scottish franchises could go directly to Granada Enterprises. A spokesman for SMG, which sells some &£120m of airtime a year, 15 per cent through its own Television Sales Scotland, says the situation is “fluid.”