Industry calls for retention of current TV ad-minute rules

by Emma Barnett, Media Week 14-Oct-08, 10:00

LONDON - Agencies and broadcasters want Ofcom to stick with current rules on TV advertising allowances as the regulator consults on possible changes.

As part of a review of the amount of permissible TV advertising, Ofcom is proposing three options. One is the retention of the current system under which non-public service broadcast (PSB) channels, such as UKTV, have an allowance of nine minutes an hour on average and can use up to 12 minutes in any one hour, while PSB channels, such as ITV, have an average seven minutes an hour and up to 12 in any one hour.

A second option would be to allow PSB channels to carry more advertising - specifically the same amount as non-PSB channels. A third alternative is for non-PSB channels to be limited to the same advertising minutes as commercial PSB channels.

Under the second option, Ofcom estimates PSBs would net £69m of additional ad revenue, while non-PSBs would lose around £46m. However, there is an overriding concern that such a move would cheapen the price of ad slots. Chris Locke, trading director of Publicis Groupe's central buying operation VivaKi, said: "Yes, it would give the PSB media owners more share, however it would also make you cheaper. No one wants more minutes, especially in the current climate. If there are more minutes, there would be more supply - making it cheaper for clients - which could effectively bankrupt the TV market."

Adam Turner, investment director at PHD, said: "At the moment there is a premium attached to our terrestrial TV channels and if we added more minutes there is a risk we would end up too much like American TV and it would cheapen the whole product."

Martin Stott, head of regulatory affairs at Five, however, thinks Ofcom's third option - cutting ad minutes on non-PSB channels - must be explored. Ofcom estimates such a change would drain £34m in ad revenue from non-PSBs and hand PSBs £33m of additional revenue. He explained: "We think option three - where the cab sat channels (non-PSBs) level down their ad minuteage - deserves serious consideration. Either that option should be advanced or the existing model retained."

A senior TV sales executive admitted that scaling back the amount of ad minutes on the PSB stations could be another alternative. He said: "The best option, especially in the current climate, for the PSBs would actually be to reduce the amount of ad minuteage they can carry. This would reduce supply and make advertisers pay more."

Publication of last week's consultation follows the introduction of new regulations on the distribution of advertising, which removed the rule forcing broadcasters to leave 20 minutes between ad breaks.