Advertisers resist ITV firms' urge to merge

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The Independent Online

The message could not be more blunt if it was delivered by Cilla Black. When representatives from Britain's advertising industry meet the Competition Commission on Tuesday to discuss the proposed merger between Carlton and Granada, they will give it a big thumbs-down.

The message could not be more blunt if it was delivered by Cilla Black. When representatives from Britain's advertising industry meet the Competition Commission on Tuesday to discuss the proposed merger between Carlton and Granada, they will give it a big thumbs-down.

Advertisers are dead against the £2.4bn merger, believing that a single ITV company – controlling around 51 per cent of television advertising – would be anti-competitive. And, increasingly, advertisers are coming to the view that there is precious little which can be done to prevent a monopoly in advertising sales short of blocking the merger outright.

"We are very much opposed to the merger because of the combined airtime sales force," says Bernard Balderston, associate director of UK media at Procter & Gamble, the country's biggest spender on TV advertising with an annual budget of around £115m. "We don't see how this merger can proceed."

At Tuesday's meeting, the Commission will sit down with the Incorporated Society of British Advertisers (ISBA), which represents companies responsible for two-thirds of UK television advertising. ISBA refuses to comment. However, it is thought to be worried that a merger would set a precedent for other television company sales forces to come together. The concern is shared by COI Communications, the Government's advertising agency which has an annual television budget of around £85m. A spokeswoman says: "The possible knock-on effect of other broadcasters following suit and merging their advertising sales is of concern."

Advertising agencies, represented by the Institute of Practitioners in Advertising, also have concerns. But there appears to be a little more optimism among some agencies that conditions can be attached to the merger to allay competition concerns.

"We reflect the view of our clients, and our clients are almost universally opposed to a single ITV sales house," says Rob Norman, chief executive of MediaEdge CIA, the media-buying arm of WPP Group. "ITV has half of all commercial impact and a massive proportion of the programmes that get 5 per cent of the total audience all at once."

Mr Norman says that apart from the "occasional freak of nature like the final episode of Big Brother on Channel 4", there is nowhere that advertisers can obtain a commercial audience of more than 10 million viewers outside ITV. These programmes are crucial for large-scale marketing campaigns, particularly new product launches where you want to get to the maximum number of viewers in the shortest possible time. "But what are the alternatives?" asks Mr Norman. He says the only split that has been shown to work is the divide between London weekday (Monday to Thursday) and London weekend.

The alternative to a weekday/weekend split is an alternate day arrangement – which ITV has said is unworkable – or splitting up the day into bands sold by different sales houses.

This could mean one sales house selling adverts during Coronation Street and another selling Lucky Jim. It could be the only way to make it Lucky ITV.

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