Hints of resolution amidst passionate CRR debate
In one of the more feisty and open debates heard on the subject, CRR continued to divide industry opinion at yesterday’s TV Summit, although with the ITV CEO Adam Crozier’s final words on the subject, delegates may have left the event thinking that a change may not be too far away.
“I think we will shift CRR soon,” he said, in an interview with Raymond Snoddy.
“Ofcom believe its’ time has passed… we have a clear strategy and Ofcom believe that. We will invest in programming – that’s what advertisers want.”
“Good buying agencies should be able to trust themselves to do a deal in a competitive market,” he added. “If CRR was not in place, some advertisers would pay more (although some would not) – that is what a free market is all about,” he said.
Unsurprisingly, ITV’s group commercial sales director Gary Digby, speaking in the earlier panel session had followed similar lines, claiming the “out of date” system has only benefited ITV’s competitors, while making the commercial broadcaster very “risk adverse”.
“People are deluding themselves if they think we’re going to charge 15-20% more,” he said. “If we over-charge, the market will find a way to not trade with us. We just want to be free to trade, to choose who we trade with, and under what conditions. We want to encourage more people to spend money with us, not put them off… but in truth we will charge some people more for airtime, but some people less – it depends on how much they spend with us.”
An audience vote, orchestrated by Channel 4’s Andy Barnes from the panel, showed that the vast majority of delegates believed ITV would take more money without the CRR system in place. “ITV is in the strongest position programme-wise that they have ever been. Does CRR stop ITV making programmes it wants to make?”
Phil Georgiadis, chairman of Walker Media, spoke bluntly about the TV market and his desire for CRR to go, admitting that “we have a different view to the rest of the (agency) market.”
“The notion that ITV will take an aggressive stance is only fuelled by the existence of agency deals. You can’t walk away from ITV… or any of the sales points in television. In a world without CRR, it is clear that ITV poses a bigger threat but an intelligent ITV going forward would encourage advertisers to spend more, not artificially hike their prices.”
“Agencies aren’t speaking up about CRR. The silence says it all. People just don’t want to discuss how we trade airtime. No-one is talking about conditional buying.”
Marc Mendoza, CEO of MPG, added his voice from the audience, telling of a client happy to admit to no longer negotiating with the media owner. “The new reality is that large advertisers are negotiating with large agencies for share.”
Also speaking from the audience, – as a consultant rather than auditor these days – John Billett agreed CRR “should go” and said “the industry needs to grow up”. Panellist, Nick Manning, chief operating officer at Ebiquity, who now own Billetts felt it was not a case of simply removing the system altogether.
“I don’t see a world where it is CRR or not CRR. We’re stuck in a sterile situation at the moment and neither is right or wrong. We need to come up with a better way – we should stand back, as an industry, and come up with a system that will work well because it is in the interest of agencies to have something in place.
“Agencies should be able to plan flexibly regardless of share, but agencies default to framework where most clients get pretty much the same share, which is part of the problem.”
Bob Wootton, director of media and advertising affairs at ISBA said that “advertisers want comfort and protection,” but – like Crozier later – he hinted at changes, with ISBA currently “in talks” with ITV.
Panellists Nick Bampton, CEO of The Third Way and soon-to-be commercial director of Channel 5, was in agreement with Nick Manning, and suspicious of these “talks.”
“I don’t want a full market review because it’s too time-consuming but we should sit down together and find a solution – as an industry, with everyone involved, because it is something we can all benefit from. I don’t like the sound of the ISBA and ITV discussions – that is too cosy… we should all be involved in this.”
Panel:
- Nick Bampton, CEO, The Third Way
- Andy Barnes, sales director, Channel 4
- Gary Digby, group commercial sales director, ITV
- Phil Georgiadis, chairman and chief executive, Walker Media
- Nick Manning, chief operating officer, Ebiquity
- Anna Bateson, marketing director for media and platforms, EMEA, YouTube
- Bob Wootton, Director of media and advertising affairs, ISBA
- Peter Cowley, founder and CEO, Spirit Digital Media
- Mark Brandon, commercial director, VMDS
- Jim Marshall, chief client officer, Aegis Media UK