The happiest man in the advertising industry last week must surely have been Mark Wood, commercial director of Sky Sales and chairman of the Independent Television Commission Licensees’ Sponsorship Group (LSG).
It was Wood’s creation of the LSG with nine other cable and satellite channels in May 1995 that is widely credited with provoking the ITC’s review of the sponsorship code. The ITC announced its proposals last week.
“They gave us everything we asked for,” says Wood, and he is right.
The LSG had three main demands from the ITC which were largely lost in the headlines about magazines being able to produce shows – masthead programming.
Wood believes those changes will have a far more immediate effect on sponsorship than the new rules for magazine houses. “That will eventually be a big issue,” he says. “But the magazine houses are not yet knocking down our doors to make programmes.”
The first effect we will see on our screens will come from the little noticed change to the look of a sponsor’s credits. At present, advertisers are not allowed to use their slogans or straplines in credits. But this rule has been muddied by the ITC permitting trademarks – theoretically allowing the use of “It’s Good To Talk” if BT were the sponsor.
The ITC previously said the rule was based on the European Union’s sponsorship regulations. But the EU, after prompting by Wood and the LSG, said the ITC’s view was too strict. It simply intended to prevent programmes being interrupted by crass, US-style “words from our sponsor” messages.
The ITC has accepted visual straplines, but vocal endorsements in credits are still banned.
The use of straplines will now allow sponsorship to combine its traditional use – brand association with a programme – to be combined with more tactical messages.
The second change demanded by the LSG is the regulation to allow those advertisers who fund programmes from their inception to get the same credits as those whose sponsorship money goes into the broadcasters’ pool of ad revenue.
“We currently get two letters a week from people interested in co-funding programmes,” says Wood. “Then they learn how little they can do on-screen.”
The greatest change mooted by the ITC will be its decision to allow related product categories to sponsor consumer advice programmes and for them to get involved in single interest channels or programming strands.
Wood believes it is the combination of all three liberalisations, rather than one, that makes the changes significant. They give cable and satellite broadcasters a new and better sales story as the digital TV capacity changes the nature of programming economics.
Even if 100 out of 200 channels planned by BSkyB for next autumn are for video on demand, there will still be a massive increase in demand for programming. Advertisers are the likeliest source of funds for this programming.
Cookery and motoring already have their own dedicated channels – or half day programming strands – that can now be sponsored by Oxo or Ford respectively. Wood believes the list of special interest programmes and channels likely to be shown is as extensive as the number of magazines in WH Smith.
“A magazine brand will allow unknown channels to feel more familiar,” says Tess Alps, head of Big Time, New PHD’s sponsorship and programming operation. “The most successful niche channels have been those showing old, familiar programmes. Magazines present the opportunity to show both familiar brands and original programming.”
“It is an extension of the Reithian idea of a broadcasting system that caters for everyone. Now regulations are catching up with technology.”
But not everyone is convinced that the new regulations merit such hyperbole.
“The credits issue was not such an obstacle to advertisers funding programmes,” says Alps. “Making programmes is a risk activity and advertisers are averse to risk.”
Advertisers are not the only ones who may slow the progress of advertiser association with programmes. “It is likely that some broadcasters will take a position that is more restrictive than the regulations,” says Alps. “Broadcasters such as Channel 4 will want to protect their programming brands from too much association with advertisers.”
ITV rarely supplies much consumer advice programming, so opportunities are limited. But it will be a mainstay of Channel 5’s programming. And as the new channel has a tiny programme budget it will be looking at novel ways of stretching that spend. Some deals are already being negotiated.
Total sponsorship revenue is stuck at about 45m this year out of a 2bn TV advertising market. So, however big the impact of these changes, it is clear the TV sponsorship market desperately needs it.