Dean Wilson, UK managing director at Active International, says as we leave the noughties and get stuck into the teens, expect more change and plenty of ‘Teenage Kicks’ reverberating loudly in the TV mosh-pit...
2010 was a great year for TV advertising, if you were a
channel at least.
After all, digital is not killing TV, much to the consternation of
trend-watchers, and there is good evidence live TV fuels
conversations on social media, a particularly hot topic right
If you were an advertiser or media agency, 2010 was a year
of inflationary rates and managing guaranteed pricing deals.
But what about the year ahead? After collating media agency
forecasts for TV advertising in 2011, the consensus seems to
be on a fairly neutral market overall. A likely small increase
in demand (revenue) with some supply-side (loss of impacts)
will mean slight inflationary pressure, varying widely on a
There has also been further consolidation on the media
owner side, with fewer major sellers trading with buyers in
2011 than in 2010, with Sky Media taking on Viacom Brand
Solutions and the Virgin Media channels; and the UKTV
channels moving to Channel 4.
Traditionally, advertisers and media buyers have considered
consolidation amongst media owners as a threat, leading to
less flexible trading terms, cross-selling and higher prices.
In 2011 these concerns are not confined to TV; cinema,
outdoor and online have the same issues. But what about the
major TV channels - how buoyant are they and what do
advertisers and media buyers need to bear in mind?
Channel 5 appears to be in a tough place as they have a lack
of any programmes guaranteed to deliver huge audiences.
However, Richard Desmond is not to be underestimated in
his ability to turn an ailing media business into a cash-cow.
The widely talked about deal with Endemol to secure Big
Brother for C5 is on paper a match made in heaven.
Nonetheless BB is a big gamble for them and it will be
interesting to see whether Desmond cuts a deal,
driving-down the price he pays Endemol, perhaps including
performance related bonuses. In my opinion it’s not
guaranteed that cross-promotions in Desmond’s press and
magazine titles for the likes of BB will have sufficient reach
and influence to deliver a banker for the channel.
Sky has successfully positioned itself as the UK broadcaster
with the widest range of programming, even more
than the ad-free BBC channels. Sky Atlantic is the latest
addition to its exclusive subscriber offerings. Although the
HBO programmes shown on Atlantic deliver relatively low
audience numbers, these shows garner massive critical
praise. Sky have continually shown their ability to give
people what they want, and often previously got for free,
enabling them to reduce churn and attract pay-tv
refuseniks. The key issue to watch with this UK
mega-player is whether with its solid 10 million+
subscriber base and a focus on average-revenue
per customer, it continues to be as advertiser
Channel 4 has a newish boss and a raft of new channels to
sell, as it is now also responsible for the UK TV portfolio of
channels. This is interesting because C4 has
historically been sold at a premium to TV buyers because it
has a greater proportion of upmarket and lighter viewers than
other terrestrial TV channels, whereas the UK TV channels
have previously been sold at a discount to the market. The
big question is - will C4’s sales policy guarantee an upturn in
commercial revenues commensurate with increases in their
ITV had, by anyone’s measure, a fantastic 2010 and it is
testament to the power of TV, in the face of forecasters
rubbishing the “linear” broadcasting model that is still ITV’s
bread-and-butter. Nothing changes fundamentally this year
with the exception of the commercial management team.
ITV’s clean-out of its highly successful old-school traders
signals a change of sales strategy. ITV continue to lobby for
the removal of the restrictive, from their perspective, contract
rights renewal mechanism (CRR). It looks like there is
going to be a “short focused review” of the TV trading
market, which would probably lead to the end of CRR.
Perhaps now is the time for ITV to strike first and move to
abolish share deals and look at more flexible commercial
propositions better suited to advertiser’s needs. This will
allow them to kick-start the commercialisation of their entire
For TV advertising to really prosper, new and more flexible
ways of investing in commercial TV are needed.
Product placement, sponsorship, advertiser funded
programmes, video-on-demand, online and social media
synergy are already there.
The millstone of share deals, which in my view the market
doesn’t need any more, just results in TV buyers switching
money between two or three of the sales operations, with
smaller players, left scrabbling for the scraps.
However, don’t expect any transition to be smooth; this is TV
trading we are talking about.
So as we leave the noughties and get stuck into the teens,
expect more change and plenty of ‘Teenage Kicks’
reverberating loudly in the TV mosh-pit.