The UK’s three largest commercial broadcasters – ITV, Channel 4 and Sky – have said they are shifting their focus towards reaching clients directly, bringing into question the future role agencies will play in the TV buying process.
“We’ve got to get into the boardroom and talk to clients about the power of television,” Channel 4’s chief commercial officer, Jonathan Allan, said at The Big TV Festival this week.
Due to the “historic structure” of TV trading models, Channel 4 hasn’t in the past had the resource to go and speak to clients directly, he said.
However, as part of the broadcaster’s ongoing restructure as it relocates its headquarters to Leeds, Allan said C4 is looking to increase its senior client resource and employees with skills in business strategy and marketing, who are able to talk to clients “in their language.”
“We need people who understand how our clients work,” he said.
In December last year, a multi-million pound trading dispute between Channel 4 and Publicis Media saw the advertising network pull its clients’ ads from across the broadcaster’s portfolio of channels.
Talks between the two companies allegedly broke down over the mechanics of trading, as Publicis hoped to move to a volume-based rather than share-based deal. In an unprecedented move, Allan personally wrote to Publicis’ clients to reassure them during the quarrel.
The dispute was resolved early in 2019, with the network’s media agencies, including Starcom, Spark Foundry and Zenith, resuming trading with Channel 4 last month.
Meanwhile, John Litster, managing director at Sky Media, agreed that an increased focus on clients is essential to the future of commercial broadcasters, and said Sky has also been “reorganising” to that end.
Litster added that for the three broadcasters – who have been increasingly working collaboratively to promote TV advertising as Facebook and Google siphon off the adspend – “one of the challenges we’ve agreed on [but] have not executed yet is having a consistent message that the three sales teams can go out and talk to clients about.”
That is something they are currently working to deliver, he said.
Additionally, ITV’s managing director of commercial, Kelly Williams, said that over the past 12 months the three broadcasters have been in talks with clients about the possibility of pitching for briefs together.
“If you’ve got a brief you think we could work together on, we’re up for it,” he said. “Again, [we’re] taking that collaboration to the next level.”
2018 was a year of record collaboration between ITV, Sky and Channel 4, marked by the launch of The Big TV Festival in February. This year’s festival saw its invitation extended beyond media planners, with more than 90 client representatives in attendance.
Speaking to Mediatel in response to the broadcasters’ comments, Bob Wootton, industry commentator and principal of Deconstruction, said: “The commercial model that has served broadcasters well for years is no longer optimal.”
“Recent low growth and the prospect of revenue decline in 2019 has forced broadcasters to reconsider and realise they should be talking to the money directly and outside the mega deal frameworks,” he said, adding that to date, only Sky’s Adsmart has significantly broken this mould.
“Expect the network agencies, who know their model is broken but can’t figure out a different way of serving their masters’ margin demands, to rail against and attempt to punish broadcasters who “dare” to go direct,” Wootton added.
“To the broadcasters, I say hold your nerve.”
This story first appeared in our sister publication, Mediatel Newsline.