UK Media Watchdog Drops TV Ad Sales Review

15 December 2005

The UK media regulator Ofcom has dropped plans for a review of the television ad sales market planned for next year.

The review was one of the Competition Commission's conditions attached to the 2003 merger of commercial broadcasters Carlton and Granada to form the ITV giant, which currently has more than 40% of the ad market.

Now, says Ofcom, "the case supporting the need for a full review of the entire market has not been made".

The watchdog adds that it has received no complaints or calls for a review from either the advertising or broadcasting industries. It claims there is "no strong evidence" that the current operation of the TV ad sales market is detrimental to consumers.

The decision may have been taken, in part, because of the desire by advertisers, agencies and rival broadcasters to keep in place the Contracts Rights Renewal agreement.

Under CRR, advertisers are entitled to reduce their adspend with ITV in line with a fall in viewing figures. Most observers agree the system has put an effective curb on any potential abuses of power in the market.

Any review could have led to the CRR being ditched. Ofcom says it will continue to monitor the system and will cooperate with any review demanded by the Office of Fair Trade, but adds that any subsequent recommendations will have to show they will not adversely affect the market.

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