Howell he pull it off? Rupert reveals his plans to save ITV

Advertising legend Rupert Howell was hired by Michael Grade to mastermind the commercial future of ITV. Phone-in scandals and the departure of Dawn Airey mean he has a difficult job ahead. He tells Ian Burrell of his plans to save the famous brand

Just like James Bond, Rupert Howell drives an Aston Martin. Unlike Daniel Craig, whose Aston is conspicuously placed on the set of Quantum of Solace, the ITV managing director generally keeps his sports car behind electric gates at his Surrey mansion.

But product placement is a practice Howell heartily approves of, and one he hopes will help to greatly improve the finances of Britain's largest commercial broadcaster. As he looks out across his many acres, ponds and outbuildings, he dreams of a day when Barbour jackets can be legitimately introduced into the script of Emmerdale.

But first he knows he must cut through an enduring suspicion that product placement is a form of brainwashing. "Product placement has the huge potential to be positive, but there's a lot of people whose political opinions were formed in the Sixties and Seventies, in the era of Vance Packard's The Hidden Persuaders, which was all about how a lot of advertising was subliminal, surreptitious," he says. "But you only do product placement if it enhances the quality of the show and makes it more authentic by putting real brands in. Clearly the brands cannot have, and will never have, any influence over the script or the content because that's not allowed and we wouldn't allow it.

"But I live in the countryside where, if it's pouring with rain, people say, 'Put on your Barbour' – they don't say, 'Put on your waxed raincoat'. In Emmerdale at the moment they have to say, 'Put on your waxed raincoat' – how ridiculous is that? If Barbour then have to give a little bit of money towards the production of Emmerdale I can't see anything wrong with that, particularly as in the credits you'd be saying, 'Barbour is a contributor towards this programme.'"

So Howell and ITV are hard at work lobbying the Department of Culture, Media & Sport to modify regulations in line with the European Union's Broadcast Directive, which took a positive view of product placement. "Why shouldn't advertisers who have a brand that legitimately sits in a script take advantage of that?" asks Howell. "It doesn't do anybody any harm, it helps to defray the costs of production, keeps production in the UK. I can't see anything other than it being a good thing."

As a film buff he has been impressed by Hollywood's use of such commercial opportunities, with Coca-Cola signs appearing in Superman movies and Apple computers in Independence Day. "What we are seeing in all the current movies is either very subtle and natural product placement or the happy and joyous product placement you get in the Bond movies. Everybody is happy because they love looking at Astons and Bond should be in an Aston and it's just not a problem, nobody is being fooled."

Howell, 51, is one of the most famous names in British advertising. He made his millions by turning Howell Henry Chaldecott Lury (HHCL) into the Agency of the Decade in the 1990s, as it transformed the industry with campaigns such as Ronseal's "Does exactly what it says on the tin" and Tango's "Slap" ad, which featured an innocent bystander being whacked round the chops by a fat genie with orange skin. As the "client man", Howell wasn't directly responsibility for such creativity, though he accepts "partial credit" for developing "an environment where something could happen or I helped my creative partners make the right choice". It was, he notes, his own idea to launch the First Direct bank on a Sunday to distinguish it from rivals on the high street.

HHCL was sold in 1997 to Lord Bell's Chime Communications empire, of which Howell became joint chief executive, before he left to head up McCann Erickson. Last September, Michael Grade brought him on to the board of ITV, with the brief of transforming a brand that numerous observers have derided as a basketcase.

The broadcaster's reputation, already beset by falls in its share price (down below 60p, compared to 135p 18 months ago) and the long-term decline of television advertising revenues, has taken a further battering, with record fines and admonishments from the regulator, as well as the sudden departure of the director of global content, Dawn Airey, who with Howell and the director of television, Peter Fincham, made up Grade's dream team. "I wouldn't say it was damaging. I'd say it was disappointing," comments Howell on the resignation of Airey, who like him had been identified as a possible successor to Grade. "I mean, I like Dawn a lot, I think she's fabulous, but she assembled a fantastic team of people who have stepped into the breach straight away. It wasn't good news, and nobody is trying to say it was good news, but this place is massively bigger than her, and the management team is incredibly strong, so we're just going to get on with it."

Surprisingly, Howell makes light of the damage to the ITV brand of the premium rate phone-in scandals. "I didn't see a single negative or comment from any customer," he says, drawing a sharp distinction between the views of clients and the shrill cry of media commentators. "I think the damage was done in the opinion-forming world because the press latched into it inevitably and made a huge fuss about it," he says. "I think people who have really looked at the issue recognise this happened before the current management was in place and we have lifted every stone and done more than any other broadcaster to make sure we put it right."

As a former partner of Tim Bell, Howell's PR skills are as smooth as his client management ones. His ability to network with chairmen and CEOs is admired throughout the media, and he claims that business figures are universal in their belief that "we all need a strong ITV".

Aside from product placement, he wishes to develop branded content and advertiser-funded programming and to reduce the regulatory commitments that he feels tie the hands of the broadcaster. "You have got a position where Google is bigger than us and internet advertising is going to be bigger than television advertising next year," he says. "We are not asking for Google to be regulated the same as us, we are asking for us to be regulated the same way as Google – ie, more deregulation."

That does not mean more adverts – Howell points out that Fox TV in the US has recently realised the commercial value of reducing the length of commercial breaks – but greater flexibility. "We are in the odd position where the regulator tells us how much [advertising] we can have, when we can display it, how much we can charge for it, and we have to sell it irrespective of the price. I can't think of any other industries, other than the energy and utility companies, that have the same sort of restrictions," he says. "Our costs of acquisition of top sporting events, our talent costs, are all going up, yet there's deflation in the airtime market place: advertising airtime is now cheaper in real terms than it has been since 1985."

He reveals that during Saturday night prime-time showing of the drama Lewis, ITV found itself having to run promotional clips instead of adverts because it "used up all our Saturday night [advertising] minutage". "If we've got a particularly strong Saturday night, we could have a bit more minutage there and a bit less midweek. All we are asking for is flexibility."

Another gripe is the perceived growing commercial instinct of the BBC. ITV has formally complained over the BBC's deal with Robinson's to sponsor Sports Personality of the Year. "It ended up with John Inverdale joking on radio, 'I've got to say "in association with Robinson's" because that's what it says in the contract.' That's just not what the BBC is for, in my opinion. And they don't always charge the proper market rates. It's a double whammy – they're taking money out of our mouths and also distorting the marketplace. Personally I thought it was just shocking."

But he is naturally upbeat, emphasising that television viewing has "actually gone up" in the past decade, but wanting to embrace the internet, which he regards as "more of a technology than a medium". Though he admits "we were a bit slow in our online development", he says that ITV.com is now "going gangbusters", using a favourite Howell expression. ITV's Friends Reunited site is also growing rapidly, now that it is free to join.

"Friends Reunited invented social networking, they just hadn't realised they'd done it. Along comes Facebook and Bebo and MySpace, who are free to the user, and that's changed the dynamics of the market. At the point of payment we were losing something like 90 per cent of people because they're used to not having to pay," he says, describing Friends as "grown-up social networking".

ITV's family of digital channels are also going pretty gangbusters, though Howell accepts that ITV3 and ITV4 could do with a slightly sharper identity. "People know ITV2 is aimed at 16-34 year olds. ITV3 and 4 are less well delineated. ITV3 is for slightly older more upscale viewers and ITV4 is more for men. But we've been less explicit about that."

Told by Grade to "bring the customer and the brand into the boardroom", Howell thinks more can be done to develop other ITV hallmarks, such as Coronation Street, Emmerdale and I'm a Celebrity... Get Me Out of Here!

"Corrie has 10 million viewers, three times a week. It's a huge brand franchise. You have to be careful how you treat that – it's a precious commodity for the viewers who own it," he says. "Ten years ago, the set of Coronation Street was the second biggest tourist attraction in the north-west of England, but it was closed down because we weren't making money doing it. Maybe that's because we were trying to do it ourselves. We're not a tourism business, we are a content maker and a broadcaster. So why not reopen the Coronation Street set and maybe partner or license it to Madame Tussauds, who know how to run a visitor's centre?"

ITV's critics may whinge, but Howell won't have it. He points to a Marketing Week survey that names ITV as having climbed into the top 25 of the public's favourite British marks. "It's a very, very robust and popular brand," he says.

The cricket-loving Howell, who is on the marketing committee of the MCC, knows he is operating in adverse economic conditions, but demonstrates his doughtiness in the firing line by holding up his right hand to show a finger swollen and bruised after a quick bowler "turned me round", representing Old Wellingtonians at the weekend. So they have had their knuckles rapped, ITV and Howell both, but the broadcaster will need all this adman's guile and charm if it is to negotiate the stickiest of wickets that stretches out before it.

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