Channel 4 Exploits ITV Ad Rate Mechanism, Accuses IPA

13 June 2006

The Institute of Practitioners in Advertising - the official body representing British advertising, media and marketing communications agencies - has criticized Channel 4's sales arm for attempting to exploit the Contract Rights Renewal mechanism.

The CRR is a deal brokered in 2004 by the Competition Commission between the then newly merged ITV and agencies. It is designed to prevent the ITV network from abusing its [increasingly less] dominant audience share.

However, it seems that over-zealous Channel 4 salespeople, their confidence boosted by ITV's continuing ratings decline, have been telling agencies that unless they divert some of the CRR revenues recouped from ITV, C4 would not strike a deal.

Such a policy if pursued by ITV would be banned under the CRR rules and agencies are angered at C4's actions. The IPA has protested accordingly to media regulator Ofcom.

According to the most recent report from Ofcom's CRR adjudicator: "[There is] evidence that CRR flexibility has encouraged a similar laziness [to ITV] in the approach of some of the other broadcasters who have likewise focused their sales policies simply on acquiring a share of CRR [revenue] movement."

Data sourced from Media Week (UK); additional content by WARC staff