ITV fails to agree ad deals for mobile offer

by Andrew McCormick, Media Week 05-Jun-07

ITV will roll out its mobile service without advertising revenue following its failure to reach a deal with mobile operators.

In a blow to its plans to turn mobile into a major distribution channel,
the broadcaster has been unable to find a compromise over the rights to
sell advertising when it makes its content accessible via mobile.

Media Week can reveal that it will make its content available through

tie-ups with three operators - O2, Orange and Vodafone.

Its content is currently only available on its dedicated off-portal WAP
site, which requires users to pay a more expensive tariff and higher
data charges than operators' portals.

According to ITV, of the three deals with operators, one will launch in
two weeks, one in one month and one in two months' time.

But because both ITV and the three operators have refused to relinquish
control of their mobile inventory, the services will launch without
advertising, denying ITV revenue from video advertising and banner ads.
The adverts that appear on ITV1 shows will appear when the programmes
are streamed to mobile, but advertisers will not pay any extra.

Melissa Goodwin, head of mobile at ITV, said: "There are no ad
agreements as yet and we may not manage to reach agreement on all of
them. Currently our on-portal plans will not have advertising, but our
view is that it is better to go live without inventory."

The stalemate means that ITV's revenue share with the operators will
rely on one source: a slice of the cost that punters pay for clips of
ITV's footage.

Goodwin was adamant that ITV would not cede control of its advertising
inventory, but said that there is room for negotiation.

"We could work it so that we have a period of handling the advertising
and then the operator could do it for a period," she said.

Despite the setback, ITV is seeking its first mobile sales manager to
sit alongside the broadcaster's head of red-button advertising and head
of online advertising.

O2, Orange, and Vodafone refused to comment.

Meanwhile, ITV has extended its contract with mobile ad sales house 4th
Screen Advertising for a further year. But Goodwin said that ITV will
work to take its mobile ad sales operation in-house within 12
months.

"Next year the big three operators will offer flat-rate tariffs which
will lead to 2009 becoming a big year for mobile," said Goodwin.