Industry issues: time for advertisers and agencies to work together

Looking ahead, there is definitely no shortage of big issues coming our way. Firstly, there is the macro issue of the freedom to advertise itself. Increasingly, politicians are regarding advertising bans and restrictions as the way to show they are tackling some of the big social issues that are causing major concern. However, these problems are also usually very complex and difficult to solve. So the temptation, urged on by lobby groups, is to make some dramatic gesture. Cue advertising to be the public scapegoat.

RESPONSIBLE ADVERTISING

Of course, I believe in responsible advertising made accountable through tough self-regulation, and we have made big strides working with the IPA, the AA and others to extend this regime into broadcasting.

I'm also not saying that advertising might not play a role in getting to grips with such issues as child obesity or binge drinking. However, we have to convince the politicians in Westminster, and increasingly Brussels too, that advertising is only one element and should not be disproportionately treated just because it's an easy target and makes for good headlines.

Sadly, what is not always appreciated is that the consequence of this burning desire for communication bans and barriers between brands and their consumers is a less competitive, less efficient economy.

We've already shown, in the case of alcohol, that when we are constructively involved, we can work with the regulator to revise codes to reflect public sentiment.

In the current case of advertising food to children, it would be ostrich-like not to constructively support tougher self-regulated content codes. However, if combined with the dramatic volume and scheduling restrictions included in Ofcom's consultation, we might be facing a very unreasonable and totally disproportionate set of remedies.

Ofcom has said it is open to suggestions from the industry. This is a big issue that needs clients and agencies to work closely and energetically together. When we've hopefully reached an acceptable and fair resolution for food advertising to children, I can assure you this will not be the end. Lobby groups and politicians will be lining up their next target categories.

THE MEDIA ENVIRONMENT

We also need to face the issue of an increasingly competitive media environment. Of course we want healthy, profitable media owners. However, there are certain circumstances where markets can become competitively distorted in favour of the media owner, and that is bad for advertising.

One of the specific hot issues of the moment is ITV and the desire for Ofcom to relax or release them from Contracts Rights Renewal (CRR). The ISBA position on this is very clear.

At the time of the Carlton–Granada merger, CRR was established as the key remedy for allowing such a high share of the airtime market to be permitted. This was for the protection for both clients and their media agencies.

Since CRR links ITV's failure to drive its audiences with its ability to generate revenue, it is understandably seeking to overturn the agreement at the earliest possible point in its minimum threeyear lifespan. ITV still continues to have over 40% of the market and clearly any proposal to modify CRR would have to rightly demonstrate and substantiate that the wider market would not be adversely affected.

We want a healthy ITV, and wish Charles Allen well with his strategy to make it so, both through increasing audiences and digital channels. However, we cannot say the same for his intense lobbying to get CRR removed or 'made looser'. As an industry – client and agency alike – we need continued protection from a dominance whose creation would not have been allowed in our own markets.

Similarly, turning to the issue of the funding of the BBC, I am again delighted that the IPA and ISBA have found common ground to protect our joint interests and indeed have made a joint submission to the Department for Culture, Media and Sport.

As in the case of ITV, it is not that advertisers and agencies are somehow anti-BBC. Far from it, in fact. I certainly believe that we need a strong BBC setting high broadcasting standards, as it has done for decades. However, we also need to work very hard to prevent an over- funded BBC, which can use its financial dominance to seriously damage the commercial sector. This would only lead to us losing the audiences we need and raising the cost to us of reaching them.

What do we mean by over-funded? I call the RPI +2.3% per annum requested by the BBC, supported by the rationale that this will be needed for digital switchover, over-funded.

As the IPA and ISBA have argued, these switchover costs should be separated out and not rolled in to an excessively inflationary general settlement. Also, given that the licence fee is charged per TV home and the number of homes is rising as family size diminishes and single occupancy is on the increase, this covertly enhances BBC income. We cannot argue for this to be scrapped but we can, and have, argued for its positive impact to be used to offset future settlements.

How long would any CEOs survive if they presented a budget to their board with a built-in annual increase in their cost base of RPI +2.3%?

TECHNOLOGICAL ADVANCES

We also need to work together in managing and exploiting the phenomenal changes we are currently experiencing in the commercial communication environment.

Every generation believes it is going through the most dramatic shift ever. However, both as a retailer of technology and as an advertiser, I am totally convinced that the combined affect of digital television, the internet, mobile video downloading and mobile TV – in other words the whole digital revolution – represents the most fundamental shift yet experienced in the marketing and advertising environment.

From the media perspective, we can see the fragmentation of audiences across multiple platforms and channels. Of course advertisers want access to segments but we want mass too.

So we need to understand how, in a world of different media consumption, we can get our messages to enough of our target customers enough times. That's why ISBA is a strong supporter of IPA Touchpoints, which aims to get a better, deeper understanding of all media consumption and how it relates to lifestyles.

THE WAY FORWARD

From the creative standpoint, the advertising industry needs to show us the way on new media. It must demonstrate that agencies can translate creative skills from traditional media to new digital opportunities.

We need quality input to counter creative fragmentation. Brand messaging over more platforms and channels calls for even more creative glue adapted for each channel. This glue comes from big creative ideas.

We are also looking to the industry to advise on how the new media, particularly the internet, is being used by customers and for creative ways to deliver our messages in that environment. It is a new world. The old solutions don't apply.

For example, many of our customers are using the internet as a range and price reference guide. In the past, this role was carried out by press advertising. New approaches are required to identify the relevant customer messages and manage their delivery – all in a world where space is limitless.

There's nothing like an external fear to bring old warring combatants together – and today we have those fears coming at us from many directions.

So, I hope the relationship between IPA and ISBA can continue to grow and prosper – indeed, I would suggest it is critical to the future of advertising that it does.

This article featured in Market Leader, Summer 2006.