Advertisers the length and breadth of the country reacted with anger when the news broke that the House of Lords Communications Committee said that broadcasters should cut the number of minutes in a TV commercial break.
The published report from the committee recommended that the advertising minutes on all commercial channels should be reduced to 7. Currently only the Public Service Broadcasting channels; ITV1, Channel 4 and Channel 5 are subject to this limit. All other digital commercial channels may air an average of 9 minutes and 12 minutes at peak times.
Essentially if Ofcom implement the recommendations and reduce the advertising minutes to 7 across all channels, advertisers could have to pay up to 20% more because of the fall in supply. With 45% share of the TV ad revenue this change would be seen as highly beneficial to ITV.
The ISBA, the trade body for advertising clients, are said to be ‘disappointed and bemused’ by this ruling. Essentially the ISBA have been beaten at the lobbying game by ITV who have rolled out their big guns, ex-Tory party chairman and current Chairman of ITV Archie Norman to talk to his mate Lord Clement-Jones, chair of the Communications Committee and previous LWT head of legal services.
Perhaps this is a gilt edged opportunity for agency’s to take a leaf out of ITV’s book and start lobbying client side marketing managers and directors of the on-going virtues of digital marketing.
2010 saw a 10% increase in online advertising spend to £1.9billion lifting the medium to a record market share of 24.3% - this is expected to grow by 8% in 2011.
Key drivers for this increase in growth can be put down to an increase of 3.7m active people online in the last 12 months, 92% broadband penetration of the UK population, social media accounting for 23% of all time spent online and a flood of ‘always-on’ devices on the market such as iPads, eReaders and smartphones. Top digital spenders in 2010 were FMCG, entertainment and media and Financial Services.
Guy Phillipson, chief executive of the IAB, said:
“The return to double digit growth in UK online advertising is characterised by increased investment by major brands - particularly in FMCG and entertainment. The effectiveness of social and video ads for classic brand building is reflected in these formats enjoying exponential growth. Add to that the clear accountability of performance marketing online, and we have a channel which now commands a quarter of total UK advertising spend.”
This growth is only set to increase and while the House of Lords Communications Committee report may benefit broadcasters like ITV this surely can only be a short term move as Marketing Directors channel more of their advertising budgets to more effective and measureable digital channels.