ITV Merger: Sales Teams Must Divorce, Insists Britain's IPA

01 July 2003

The Institute of Practitioners in Advertising, representing Britain's advertising agencies, last week reiterated to the Competition Commission its insistence that a merged ITV drops its plan to meld the respective sales forces of the happy couple – Carlton Communications and Granada Media.

Advertisers’ trade body, ISBA (the Incorporated Society of British Advertisers), sang from the same hymn sheet with a like demand. Given that a merged ITV will control over 50% of Britain's TV advertising market, both organisations fear the Byzantine compromise proposals floated last week by the antitrust watchdog may allow the merged broadcasters to unify their respective salesforces.

The Commission has set-out two possible options designed to maintain a competitive market in the face of a single ITV salesforce:

(1) Auctioning a percentage of ITV’s airtime to third parties – including agencies and even other broadcasters – to create a secondary airtime market and ‘reserve price’.

(2) Rolling-over current contracts for a set period, thus allowing advertisers/media agencies to fall back on terms negotiated during a period of competition between Carlton and Granada. This proviso would kick-in only if buyers felt the combined sales house was unfairly exploiting its position.

Neither option appeals to ISBA or the IPA [nor or anyone other than the two broadcasters and cryptic crossword fans] and their concerns have already been conveyed to the Commission both in written and oral form.

IPA director for media affairs Geoff Russell summarized the objections: “ In essence, advertisers would either be required to keep their media approach frozen in time – or face the alternative of finding themselves forced to negotiate with a monolithic single ITV sales house, which holds all the cards. Having established that ITV is essential and unsubstitutable for most major TV advertisers, you can understand our concerns.”

Meantime, the watchdog has extended the deliberation period by two months to hear the views of all the parties. It will deliver its recommendations to trade and industry secretary Patricia Hewitt on August 26.

Data sourced from: IPA Online (UK); additional content by WARC staff