Has ITV Just Offered a Glimpse into TV Advertising’s Future?

ITV has raised eyebrows by doing away with late penalty charges for April and May, a move it hopes will attract advertisers as scandals continue to blot the digital landscape.

The “one-off opportunity”, announced by managing director of commercial, Kelly Williams, not only allows brands to buy into ITV’s programming at lower rates and at shorter notice; it’ll also see advertisers who have already fallen foul of late fees for April and May reimbursed.

It’s a scheme that, on the one hand, is expected to cost ITV millions in lost penalty charges. Yet conversely, it’s also likely to pay dividends by attracting a wider suite of new and returning advertisers.

A model at odds with modern brand needs

This inevitably begs the question: should it remain a temporary measure, or is it time to bring the curtain down on Advanced Booking deadlines once and for all?

Currently, AB deadlines require an advertiser to book their ITV airtime eight-weeks in advance of a campaign’s launch. Brands and agencies that adhere to this receive a discount based on share of spend, but for those that fail to comply, late penalty charges are administered on a sliding scale. This could be as much as 50% over the general rate card price.

Whose interests are being served?

The disconnect between this outdated trading system and the best interests of a new generation of agile challenger brands is clear. It’s why, despite the litany of issues that continue to scar the digital ecosystem, they continue to eschew the brand building power of TV in favour of instant, programmatic ad placements.  

For brand and broadcaster, it all amounts to a case of missed opportunity. The opportunity to thrive in a trusted, brand safe environment where businesses can cultivate unrivalled levels of prestige, credibility and coverage; the opportunity to expand the television market, drive competition, and support innovation. It seems the only true beneficiaries are the advertisers with the biggest budgets and, by extension, the biggest discounts.

For everyone else, it’s all too rigid

Whether a market leader or startup, flexibility is now fundamental to the success of an advertiser’s media strategy. They require the manoeuvrability to operate month-by-month, week-by-week or day-by-day; without necessarily having to commit entire annual or even quarterly spends in one fell swoop.

Prosperous brands demand a fluidity in their campaign planning that allows for the nip and tuck of budget allocation based on real-time performance insights. They need the ability to optimise activity around the creatives, channels, weekdays, hours and programming that deliver the best response a clearest ROI. They want to test, learn, and build with scale.

Responding to the challenge, big or small  

If you have any prior knowledge of how Guerillascope works, you’ll know that we were founded back in 2001 with the specific mission of bringing greater flexibility to TV planning and buying. Having forged a reputation for partnering effectively with start-ups and challenger brands, our ability to work late in the market and secure last-minute deals has been integral to their success – it’s a feature of our service that is now attracting established advertisers, too.

Amigo Loans is one such client. Having concluded an off-air experiment to establish the impact this had on conversions, the brand wanted to return to the small screen immediately. However, in trying to do so with their network agency – itself restricted by share agreements with ITV – the inability to buy flexibly resulted in prohibitive late penalty charges.

Our planning team brokered an agreement with ITV that requires us to book large spends on premium airtime earlier than we are used to. Yet, crucially for Amigo, we are still working outside the restraints of AB deadlines. Such cooperation is greatly welcomed; indeed, an optimist could point to the possibility of a less hard-line stance moving forward.

This arrangement, however, is an exception to the general rule; an unusual compromise for a broadcaster that, for reasons not entirely in its control, is obligated to be less accommodating than rivals such as Channel 4 and Sky, the likes of which have a wider network of channels and therefore more inventory.

Room for a longer look?

Yet, ultimately, this shouldn’t be directed at one sales house alone; it’s a challenge the entire industry must join together in facing up to. ITV’s initiative offers a tantalising glimpse into what TV’s future could look like, but it’ll be emerging technologies that truly determine the course we take.

Some of the answers can be found in RTB and programmatic buying, but it’s clear that much more needs to be done in that sphere. Blockchain also offers considerable promise, with smart contracts and fraud-proof distribution ledgers likely to boost transparency and efficiency in the years to come. For now, however, a more nuanced and pliant approach could enable a wider array of 21st century brands to thrive. Whether intended or not, ITV has shown the way.