The Institute Of Practitioners In Advertising has strengthened its opposition to the proposed £2.6 billion merger of Carlton and Granada and has branded plans to regulate the way in which ITV sells airtime advertising as “flawed, complex and dangerously open to abuse”.
Earlier this week both the IPA and ISBA appeared before the Competition Commission to restate their view that nothing short of the sale of both Carlton and Granada’s sales houses would overcome their concerns over the merger of the two broadcasters (see
Advertisers Wary Of Revised ITV Merger Plans).
The Competition Commission recently put forward a further two hypothetical remedies for off-setting advertiser’s concerns about the abuse of power that the creation of a single ITV company, controlling more than 50% of the television advertising market, could create (see Competition Commission Delays Verdict On ITV Merger).
The first of these would require a percentage of ITV’s airtime budget to be auctioned off to a third party, whilst the second would involve promising advertisers that their current share deals would be rolled over into the next year.
The IPA has rejected both of these proposals, claiming their sheer complexity makes them entirely impractical. Geoff Russell, the IPA’s director of media affairs, said: “We have grave concerns whether it would ever be possible to write a behavioural remedy in sufficient detail to cover every angle open to abuse.”
He added: “Advertisers face the possibility of finding themselves forced to negotiate with a monolithic single ITV sales house, which holds all the cards. Having established that ITV is an essential and unsubstitutable for most major TV advertisers, you can understand our concerns.”
The Competition Commission was recently granted an extra two months to investigate the proposed merger of Carlton and Granada and will now report back to Trade and Industry Secretary Patricia Hewitt on 26 August.
