The majority of advertisers and media buyers fear that the creation of a single ITV sales house will drive up the cost of airtime, according to a new poll carried out for the Financial Times.
The study shows that around 70% of respondents believed that advertising rates at ITV would increase following the merger of Carlton and Granada, despite the Competition Commission’s ruling that agencies can renew their existing share deals for up to three years.
Almost 80% of the advertisers and agencies that took part in the poll predicted less competitive rates in the lucrative London market, where Carlton sells ITV slots during the week and Granada at the weekends.
The majority of respondents also believed that ITV’s largest commercial rivals, which include Channel 4, Five, BSkyB, Interactive Digital Sales, will consolidate their advertising sales houses to counteract the threat of a combined Carlton and Granada (see ITV Rivals Pushed Towards Sales House Consolidation).
More advertisers than agencies were found to be in favour of the merger, but just 22% of respondents believe that the creation of an independent adjudicator to oversee ITV’s sales practices could prevent market abuses.
The study, which had a relatively small sample size of 27 respondents, reflects the concern that a single ITV will monopolise the market for television airtime sales and will use its 52% market share to drive up prices for advertisers (see Advertisers Give Mixed Reaction To ITV Merger).
However, Mathew Horsman, director of Mediatique and consultant to Investec Investment Banking, claims that advertisers are cautiously optimistic about the creation of a single ITV capable of competing more effectively with the BBC and BSkyB.
Writing in the FT Creative Business, he says: “Advertisers may hate the easy ride given to Carlton and Granada on the merger terms, but they like what they are hearing about the mass market appeal of the autumn schedule.”
Horsman is confident that a unified ITV will be boosted by a number of longer-term positives. These include a recovery in the advertising market during 2004, a more conciliatory approach to programming from BBC and the prospect of a realignment of ITV’s public service requirements following Ofcom’s forthcoming review.
He also highlights the possibility of ITV entering the lucrative market for top flight football rights if the European Commission overturns the Premier League’s exclusive deal with BSkyB over competition concerns (see EC Stance Threatens BSkyB Football Deal).
Earlier this week Charles Allen and Michael Green vowed to work together closely to make ITV more “outward looking”. The pair unveiled a seven point growth plan that will help ITV stave off any American take-over (see EC Stance Threatens BSkyB Football Deal).
