The TV industry must watch out

Martin Bowley, the Carlton Media chief, was kind enough to dub last week’s Marketing Week TV conference as the most significant he had attended in many years. He was thinking back, no doubt, to the landmark occasion in 1989 when CNN supremo Ted Turner stirred up his audience with a prediction – soon to be borne out – that the advent of satellite TV would precipitate a financial bloodbath.

While there was no haemorrhaging of the red stuff at TV 2001, it would be true to say the scent of blood was in the air – and that advertisers were baying for it. Rarely have they been so critical – at least in public – of the state of television display advertising and the medium which sells it.

Chief among the critics was Andrew Harrison, marketing director of Nestlé Rowntree, who in a remarkable platform tour de force vented his growing exasperation with commercial television. He is not so foolish as to deny that ITV remains the single most powerful tool at advertisers’ disposal. What he did say, however, is that the TV contractors – and this includes the multi-channel platforms – are in danger of losing the plot. So immersed are they in the introverted implications of fragmentation and digital TV that they have lost sight of the big picture. “We need,” he said, “a new business model – a way to deal (longer term, and more strategically), across more media and across a longer time frame (in order) to cope with a changing environment for media consumption”. And he went on to observe that, at the moment, the fragmentation in delivery to the consumer is matched only by the fragmentation in selling to the advertiser.

Pretty robust stuff, particularly when it comes from the mouth of the UK’s largest TV advertiser (&£130m a year as a group, if the L’Oréal stake is factored in). What’s more, Nestlé is not bluffing. Throughout the Nineties, it has been steadily reducing the proportion of its total marketing budget that goes on television: from 100 per cent ten years ago to 65 per cent now, and a projected 55 per cent in five years’ time.

Here, if ever, is a wake-up call for commercial broadcasters. And one that is finding a ready echo in other marketing directors. P&G’s Bernard Balderston seems to have reached a similar conclusion (though in a quieter, more diplomatic way) and Ambrose McGinn, who represents Abbey National, another big TV spender, recently fired a very public warning shot in the same direction.

None of this is to imply that television advertising will cease to be a powerful weapon in the marketing arsenal. But it does suggest that the balance of power within “commercial broadcast ecology” is changing decisively. The ITV barons will have liked the bit where Harrison (against the ISBA consensus) came out in favour of a single buying point as a matter of client convenience. They should be less complacent about his other demand for effective cross-media, platform-neutral alliances. And his threat, should they fail to materialise in the next few years, to “walk away”.

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