Monte Carlo rails against TV costs

TV 97 was a success. Advertisers hammered home their feelings on SAP and poor programming, and broadcasters were forced to listen.

TV 97 in Monte Carlo was always going to be a bit of a gamble. Some wishfully predicted that it would end in disaster, with delegates feeling cheated of debate and unable to justify their expense accounts. But the doom merchants were disappointed.

Although some issues such as over-trading and agency deals were not addressed by the conference it was, if nothing else, the first event where the broadcasters were forced to listen to the concerns of advertisers.

Procter & Gamble media manager Bernard Balderstone attacked station average price (SAP) for fuelling inflation and being ineffective. Alliance & Leicester marketing services director Tim Pile was even more forthright, calling SAP a “con,” and calling for greater transparency. In a conference vote, 72 per cent of delegates voted to scrap SAP altogether.

Elsewhere, BT Business’ marketing communications manager Dominic Owens complained that, despite media fragmentation and the emergence of new channels such as Channel 5, programming is extremely undistinguished.

But the tone of the conference was set by Heinz sales and marketing director Robert Bailey, who in his keynote address warned the TV companies that “if the price/value equation tips heavily away from the advertisers, I can guarantee you our money will move elsewhere.”

Bailey’s speech mapped out all the issues that advertisers wanted to address: media fragmentation, media inflation and the Roulette game of airtime trading.

Bailey said: “B-brand television does not justify premium prices. In our market, the harsh truth is that increased choice has put intense pressure on prices. In the TV market it seems the opposite is true.”

“We, the advertisers, are looking for reassurance that you, the broadcasters, are going to respond positively, with imagination and ambition.”

In the event, many delegates felt they did not get enough reassurance, especially over the pressing need to reform SAP or to differentiate the new channels in a more imaginative way. But they did get a commitment of sorts from ITV.

ITV network director Marcus Plantin told delegates that it would hire a marketing and communications director, who would head a newly-created department, by the end of the year.

He added that ITV would spend 40m to promote the network, three times the previous budget last year on TV, cinema and press. Fifteen commercials were promised. But some delegates criticised the ads through M&C Saatchi as among the worst they had seen. “I was amazed at just how bad they were,” said the marketing director of one large distribution company. His view was typical.

Toyota marketing director Mike Moran was dismissive of the 40m advertising budget: “It would be better spent improving the programming,” he said.

However, Plantin also promised improved investment in youth and sports coverage, and revealed that ITV will provide exclusive terrestrial coverage of the French “mini-World Cup” tournament in June, featuring England, Brazil, Italy and France.

Despite this, an interactive poll revealed that 57 per cent of delegates expected ITV to continue losing market share in coming years. An issue which strikes at the heart of SAP.

Pile opened the SAP discussion with the assertion that it was a con: “If it is supposed to be an average price, how is it that everyone can get a discount?”

“I don’t want station deals, I want programmes that deliver audiences,” he added.

Balderstone said: “SAP is fuelling inflation. As we move away from the monopoly situation from which it rose, it is no longer an effective mechanism.”

Mick Desmond from Laser sales defended the system: “Advertisers who complain about media inflation should be wary of replacing it with a discount market price, which is a charter for inflation.”

Initiative chief executive Phil Georgiadis said that abandoning SAP and bringing in a proper free market would mean advertisers having to pay premium prices for prime-time programmes.

Balderstone said that inflation under a new system could be avoided by increasing minutage.

Carlton UK Sales managing director Martin Bowley claimed there was no need to create more minutage on ITV. Channel 5 will create 61,000 more minutes on commercial TV and hopefully take ratings from the BBC, he said.

Bowley admitted that ITV packs airtime into premium programmes, such as 12 minutes during an hour of Inspector Morse. He added that research by Carlton’s ad agency Lowe Howard-Spink shows that an increase in minutage decreases effectiveness. “Any increase could not come from programme promotion, because it drives ratings, but would have to come from programming.”

However, chief executive of the Billett Consultancy John Billett said that extra minutage could be extracted by cutting the end-credits in programmes.

Desmond said that if SAP was to be reformed, advertisers would need to guarantee cash payments. He added that those agencies paying SAP for non-ITV companies are wasting money.

One of the most worrying trends for advertisers is that commercial impacts are falling – between 1992 and 1996 impacts for adults fell by four per cent – and TV inflation rocketing, while television advertising is becoming less effective.

A speech by Phil Gullen, managing director of Carat Insight, revealed that between 1992 and 1996 viewing interest in ITV programmes has dropped.

The research, conducted by Carat Foretel and BMRB, discloses that, in that five-year period, the percentage of viewers paying little or no attention to ITV programmes has increased from 25 to 30 per cent.

Gullen says one of the major reasons there has been less involvement in ITV ads has been the impact of satellite in splitting the audience.

If nothing else, Monte Carlo TV 97 has set the agenda for the next time around. Advertisers have voiced their concerns: now they need to start a programme of action to reform the trading system.

The conference was a small victory for advertisers. They have set the roulette ball rolling round the airtime trading debate, but the TV sales companies remain in control of the wheel.


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