Magazine article Marketing

Clearer Picture of ITV Inflation

Magazine article Marketing

Clearer Picture of ITV Inflation

Article excerpt

McVitie's call for fellow advertisers to boycott selected ITV sales houses in protest over media inflation won support at the recent Marketing Forum. But Martin Bowley, managing director of Carlton's Television, argues that the problem is neither as serious nor as simple as many observers claim

I think we should all take some time out from the whole impassioned furore over media inflation, in particular ITV's inflation, to stop and examine the facts.

It is worth stepping back because there seems to be a perception-versus-reality gap relating to the real level of inflation. In fact, before you read further, please indulge me and have a guess at what you think TV inflation is against one of our most traded audiences: adults.

Make no mistake, ITV is concerned about audiences; anyone who tells you we are not is wrong. Any organisation whose business is suffering because of inflation, perceived or otherwise, worries about the root cause and what can be done about it.

In a straw poll among clients on board the Oriana, we asked what they thought ITV inflation actually was. Answers ranged from 15%plus to 50%-plus year on year. It is a curious anomaly that, amid all the raging, the extent of the problem is very unclear among many advertisers.

The real world

The truth is that TV inflation for the year to date is 5%. ITV's inflation is 7%. These figures are much the same as they were last year. I accept that this is inflation, but it is not rampant. Furthermore, once BSkyB's inflation, estimated at around 20% this year, is taken out of the equation, all TV inflation would be very. close to the retail price index.

I do not wish to deflect from ITV's situation, but why, with satellite suffering higher levels of inflation, does it not release the remaining minutage it chooses not to sell but is quite entitled to?

There is intense competition in the TV marketplace, and there are almost three times the number of commercial minutes available to advertisers than there were in 1993. Admittedly, most of the channels providing the extra minutes are very small, but Channel 5 alone offers a further 60,000 commercial minutes.

It is true that a more commercially minded BBC has enjoyed renewed success over the past couple of years. However, this year, during the all-important peak (5.15pm to 11.30pm), ITV's share has been 37%, compared with BBCI's 32. …

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