Ofcom kicks off inquiry into £4bn ad market
Saturday 11 June 2011
The media watchdog has kicked off its investigation into the £4bn-a-year television advertising industry over fears it could be anti-competitive.
Ofcom yesterday announced it had launched its review of the UK's television advertising trading market after identifying three concerns that could distort buying and selling ads.
The consultation, which will send tremors through the market, will close next month, with the regulator publishing a statement in the autumn deciding whether to refer the matter to the Competition Commission.
Ofcom is worried that at present the pricing of buying and selling adverts is less than transparent. It "may make it difficult for advertisers to make meaningful and informed price comparisons between channels and act upon them".
Advertising is sold in bundles and the regulator said it is possible "that bundling, when combined with the market strength of television stations, may have a detrimental effect on competition". It added that broadcasters may be able to use its market strength to drive up its prices.
Ofcom will also scrutinise the trading model for buying and selling advertising as it "does not appear to have altered significantly in nearly 20 years. It is also a system unique to the UK."
Despite its concerns, the regulator said that the current system "may be an efficient way of managing some of the particular risks involved in planning and scheduling television advertising".
Ed Richards, the chief executive of Ofcom, told the Incorporated Society of British Advertisers earlier this year that the time was right to consider "whether there are reasonable grounds for suspecting that the trading mechanism might be expected to prevent, restrict or distort competition in the sale of television advertising airtime," adding it was the industry's chance to weigh in on a "very important issue".
- 2 Top Gear: Jodie Kidd, Philip Glenister and Guy Martin 'in advanced talks' to join show
- 3 General Election 2015: 14-year-old boy asks Nick Clegg – 'can you kill Katie Hopkins?'
- 4 University student in court for allegedly covering housemates' food in window cleaner and spit
In defence of liberal democracy
The Rothschild Libel: Why has it taken 200 years for an anti-Semitic slur that emerged from the Battle of Waterloo to be dismissed?
General Election 2015: UK will be 'run for the wealthy and powerful' if Tories retain power, Labour warns
General election live: SNP suspends two members for disrupting Labour rally
Schools forced to act as 'miniature welfare states' with teachers buying underwear and even haircuts for poor pupils
Andy McSmith's Sketch: Feisty audience is the real star of an enlightening show
iJobs Money & Business
£20000 - £25000 per annum + Uncapped commission: SThree: Can you speak German,...
£25000 - £30000 per annum + benefits: Ashdown Group: An exciting opportunity f...
£215 per day: Ashdown Group: Junior Project Manager (website, web application ...
£40-50K: Guru Careers: We are seeking an experienced Software Engineer / Softw...