Advertisers Wary Of Revised ITV Merger Plans
Advertisers have warned that proposals from Carlton and Granada to link advertising rates with audience figures in an attempt to secure approval for their planned £2.7 billion merger, would not go far enough to address their competition concerns.
The Institute Of Practitioners In Advertising believes that a behavioural remedy, thought to have been put forward by the two ITV partners in their recent hearing with the Competition Commission, would not be sufficient to prevent the creation of a “leviathan”, which could monopolise the market for airtime sales.
Geoffrey Russell, the IPA’s director of media affairs, emphasised that the industry body was not familiar with the details of the proposal, but said: “It is the concentration of power, which is our fundamental concern and we can see nothing short of the structural divestment of both sales houses, which would allay our fears – and even then, we would need to be totally convinced that any opportunity for collusion was completely removed before we could countenance such a move”.
The IPA has also joined broadcast planning directors in condemning a ban on share deals, which see advertisers agreeing to commit a proportion of their budget to ITV in return for air-time discounts.
The industry body argues that forcing media agencies to buy on a stock by stock basis would have massive implications for their profitability and could result in a significant reduction in the use of smaller commercial TV channels.
The IPA and the Incorporated Society Of British Advertisers have been vehement in their opposition to the creation of a single ITV sales house. Arguing that a merged entity, controlling more than 50% of the television advertising market, would lead to increased prices for advertisers and media buying agencies.
Both organisations have appeared before the Competition Commission on numerous occasions in an attempt to counter Carlton and Granada’s theoretical solutions to the dangers created by the merger.
The Competition Commission was due to report the findings of its enquiry and suggest its recommended remedies for competition concerns to Trade and Industry Secretary, Patricia Hewitt, later this month. However, delays of up to three months now seem likely as advertisers and rival broadcasters stand firm in their opposition to the merger.
IPA: 020 7235 7020 www.ipa.co.uk
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