At first glance, ITV's strong 2013 annual results this week suggest a return to the fine old days of TV advertising. A 30 per cent increase in profits? Is this a case of recession over, let the good times roll again?
No, these topline figures mask a more interesting renaissance for the UK’s biggest commercial broadcaster. Certainly, with a near 9 per cent leap in external revenues, ITV has just turned in its best year-on-year performance for a decade. Nevertheless, overall sales are close to what they were back in 2005. What I think we are seeing is a normalisation of TV advertising spend in line with cyclical economic recovery, but also something more structural and intriguing.
When ITV’s chief executive, Adam Crozier, claims that his charge remains the most important commercial marketing platform for brands, he is essentially correct. Despite the pressure from the new tech behemoths such as Google and Facebook, most big brands still feel that they need ITV to reach mass audiences quickly. ITV provides an appointment view – a lean-back experience – with which online media cannot yet compete. Indeed, brands still need these ad spots to provide the momentum for their digital and social campaigns.
Crozier’s investment in owned content is a smart counter-thrust against the increasing power of franchise-owners
And, significantly, the specific nature of ITV’s offer to brands is evolving. What jumped out from the results on Wednesday was the growth (20 per cent) from ITV Studios and the leap (16 per cent) in long-form video requests. Crozier is smart in leveraging ITV’s unique power as a media owner. His investment in owned content is a smart counter-thrust against the increasing power of global franchise-owners such as Syco. At the same time, ITV has become more enterprising and flexible with its premium airtime. John Lewis’ "the bear and the hare" full-length première during The X Factor final before Christmas, and the Lego-themed ad break during Dancing On Ice earlier this month, show how ITV is innovating its flagship formats in line with demand from the best minds in the ad industry. But, then, Crozier started his career as a media star, reaching the post of head of media at Saatchi & Saatchi in 1990.
Under him and the chairman, Archie Norman, ITV has regained its mojo. On Tuesday night, it even gave a News At Ten ad slot to Save the Children’s hard-hitting "first day" spot by Adam & Eve/DDB. Would that have happened five years ago?
Dominic Proctor, the president of Group M Worldwide, sums it up perfectly for me: "ITV has good content, which is well-marketed and well-distributed. Of course, there is still an investment drift to new digital channels, but broadcasters that stay fresh and relevant will continue to do well."
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