The Stage

Advertising shift turns fight vicious

Published Thursday 1 June 2006 at 14:10

Programme makers are not, by and large, among the most avid readers of the city and financial pages of the press. Those few who are will have noticed that a long-awaited revolution in broadcasting is finally upon us.

Across the Atlantic, this is the time when American TV channels would normally be celebrating the profits from the yearly ‘upfronts’ - the period when companies compete to pledge their money for airtime over the next 12 months. On this occasion the normal frenzy has been absent, returns are down and there is no indication things will improve in 2007 as advertisers spend greater amounts on other media.

Any hope of a delay before the process begins in this country has been erased by the publication last week of the joint report by KPMG and Thomson Intermedia. In a single quarter year - just three months - spending on digital media and direct mail leapt by more than a fifth and now accounts for a quarter of advertising budgets.

Cost is one consideration but so too is effectiveness. Non-traditional advertising is better able to measure responses and tailor itself to the needs of the advertiser to reach a particular niche market. Which in turn provides greater value for money.

This is a trend long familiar to printed publications. For television and radio firms which depend on ads revenue, the prospect is potentially life threatening - if not to the channel overall, then certainly to much of its product. Even with a substantial digital and online presence, such companies still need a strategy to protect their traditional operations. In the absence of any clear idea how to protect themselves against newcomers, expect commercial companies to adopt an increasingly shrill tone towards their competitors.

The prime target for this will be the BBC, which is expanding at an enviable rate, unimpeded by the need for advertising yet adopting an ever more commercial posture.

Faced with the need to survive rather than merely compete, the Corporation’s opponents will play a great deal tougher yet.