Television: ITV scores early - but can it stay ahead?

Critical weeks are looming in the world of the commercial break. Tim Luckhurst on Euro 2004's other contenders

When David Beckham leads England out to face France on 13 June in the team's opening match in Euro 2004, most of the country will be on edge. However, for the accountants and producers at ITV, it will already be a case of game over after securing exclusive rights to the opener. An audience of more than 12 million viewers is expected and advertising rates have leapt accordingly.

When David Beckham leads England out to face France on 13 June in the team's opening match in Euro 2004, most of the country will be on edge. However, for the accountants and producers at ITV, it will already be a case of game over after securing exclusive rights to the opener. An audience of more than 12 million viewers is expected and advertising rates have leapt accordingly.

Nick Theakston, the head of trading at Mindshare, a media buying agency, said: "Revenue will be up by between 10 per cent and 12 per cent on last June. They can sell this to their heart's content. ITV has not had a brilliant start to the year but during Euro 2004, revenue can only go up."

John Heather, the deputy head of television at Zenith Optimedia, said: "We estimate they are taking £40m in revenue for Euro 2004. That is 14 per cent up on last year."

ITV will enjoy a bumper June. The channel's new-found attraction to advertisers goes beyond audience size. Euro 2004 will change ITV's normally female audience profile and bring in a large share of the affluent male viewers who traditionally prefer the BBC. Beer and snack food ads will run beside pitches for cars, clothes and financial services. Clothing and cosmetics manufacturers will compete for the attention of women. Theakston said: "Advertisers who associate themselves with football will be all over ITV like a rash."

So far so good for ITV, but two issues lurk on the horizon that could cause problems. The first is how well ITV Sport can hope to compete when the first two group-stage matches are over.

The agreement that grants ITV exclusive rights to England versus France and the second group match against Switzerland gives the BBC the third and potentially crucial match against Croatia. At the quarter-final stage the BBC will choose which two matches it plans to cover before ITV gets a look-in. A BBC spokeswoman said: "We have gambled on England doing well because we think they will. We have the potential decider against Croatia and the quarter-final."

After that, it gets harder. ITV and the BBC are both entitled to cover the semi-finals - in Lisbon on 30 June and Porto on 1 July. If Sven's men make it that far, a head-to-head between Des Lynam and Gary Lineker is certain. The outcome of that is likely to be a massive decline in ITV's audience share. A BBC spokeswoman said: "We beat ITV by four to one during the 2002 World Cup.

"The BBC lead on simultaneously broadcast games was comprehensive. Gary Lineker is very popular. ITV do not do football badly, but when viewers have a straight choice they come to the BBC."

Richard Oliver, the head of TV at Universal McCann, a media agency, said the impact on what ITV can charge advertisers is real. "The figures from 2002 are typical and historically consistent. When they go head-to-head, the BBC wins by three or four to one. TV buyers have access to these figures and they will factor them into their decisions."

Nick Theakston agrees that the BBC will perform better than ITV if matches are broadcast simultaneously on both channels. But the impact on revenue will be marginal, he says. "ITV does not have to perform better than the BBC. You can't advertise on the BBC."

But another cloud hangs in ITV's otherwise bright summer sky. A survey conducted by Universal McCann suggests that Euro 2004 will see an unprecedented number of England fans watching games in pubs or bars. Richard Oliver expects "a huge amount of out-of-home viewing".

The difficulty is that advertising buyers are cynical about the value of broadcasting commercials to pub audiences. Most evidence suggests that television viewers in public places ignore the contents of commercial breaks.

The problem is that negotiations about spot prices for television advertising are based on Broadcasters' Audience Research Board figures and Barb does not measure audiences outside the home. As a result, ITV is obliged to charge less than real viewing figures might permit. Mr Oliver explained: "They are underselling the out-of-home audience. ITV will not persuade people to pay more because people are watching in pubs."

Some argue that Barb should change its method of calculating audiences to include pub viewing. John Heather disagrees. "I don't think there is any attention at all paid to the ads. People go to the toilet or head for the bar. You could never properly quantify the value of pub advertising."

Meanwhile, ITV has done a lot to enhance its coverage. Sir Bobby Robson, the former England manager, will replace the disgraced Ron Atkinson as main co-commentator and the experiment with Paul Gascoigne, whose stumbling performances during the 2002 World Cup embarrassed the network, will not be repeated. Ally McCoist, Robbie Earle, Andy Townsend and the former England managers Terry Venables and Graham Taylor join Lynam in the studio.

For the first time, ITV coverage will be backed by an interactive service of the kind pioneered by Sky Sports.

Media agencies agree that actual revenues are unlikely to change if England get to the final and the BBC dominates the ratings. And, if early ratings confirm that home-based audiences are being diluted by a rush to the pubs, media buyers may push for late discounts during coverage of the semi-final and final. They will have to negotiate hard - 90 per cent of bookings are already confirmed.

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