Should the BBC take advertising?

Should the BBC take advertising?

I am certain that anyone trying to view 24 on Sky One at the moment will find the experience more challenging and annoying than when the series first appeared on BBC2.

I am not alluding to the rampant nepotism, which allows Jack鈥檚 daughter to swan about an elite counter-terrorism organisation chattering about her boyfriend problems, I am talking about the advertising.

Unfortunately, personal intolerance to high levels of advertising is not the issue here.

Increasingly, UK viewers are being asked to pay for programming which they are not watching. In 1995, the BBC enjoyed 43% of all viewing. Now, in multichannel homes, the viewing level is closer to only 25%.

Fast forward to 2007. The analogue system has been turned off. The consumer has a choice of paying a hefty subscription to watch the BBC without any advertising or paying no subscription but with advertising. The majority would choose the latter if trends continue.

But would consumer choice, if it resulted in an ad-funded BBC, be right for the industry? The industry is in an odd shape, anyway. Satellite and ITV both took 23.6% of all viewing in 2003. Yet ITV took 51% of revenue while satellite took only 18.5% of revenue.

Clearly, we are willing to pay a premium of getting on for three times to gain access to high-cover 鈥渁ppointment to view鈥 programming, despite the targeting opportunities afforded by satellite.

Advertising on the BBC would provide better access to high-coverage programming and by increasing the supply of such impacts, would reduce the high premium being paid.

The argument put forward that the arrival of Sky, Channel 4 and Five did not have a beneficial effect on price ignores an essential difference. 鈥淐hoose to view鈥 programmes on these stations do not compare to the BBC鈥檚 high-cover programmes.

Access to great programming at lower cost per thousands will surely have a beneficial effect on the cost-efficiency of generating sales of clients鈥 goods and services.

Hugo Drayton of The Daily Telegraph commented recently that 鈥渋t would change everything, every model. I can鈥檛 see the advantages.鈥

Certainly it would 鈥渃hange the models鈥.

Certainly clients who are already expecting and receiving high levels of accountability from their agencies will have an advantage.

Certainly it would be a good time to be an econometrics expert, but better sales results for our clients are worth the effort.

Who knows, with a radical change in the TV model, some advertisers may stop thinking of airtime as a commodity and start putting more emphasis on the planning function, giving more credit for their role in delivering client value.

How about the quality of BBC programming output? Would a chase for ratings drive quality downward? I urge those who think that the BBC is still at the cutting edge of thought-provoking, mind-expanding and educational broadcasting to sit down with a TV listings magazine and look again.

The BBC would continue to generate highrating programming with more than their fair share of murders and infidelity among East End folk. They would also continue to commission distinctive programming which appeals to high-value, light-viewing subgroups.

Think of the value of the Newsnight centre break. It could also choose to please viewers further by not running nine minutes of commercials in a clock hour.

They would also be likely to improve access to new programming such as The Alan Clark Diaries by showing them on BBC1 rather than tucking them away on fringe channels.

Access to a new supply of high-cover programming combined with a lower cost base would increase the effectiveness of TV campaigns.

Improved campaign cost efficiency could in turn lead to increases in advertising budgets and a chance for television to compete for a share of the 拢5.4bn (MMS 2003) spent in print and the 拢11.8bn spent on direct marketing (DMA Census 2002鈥2003).

Lastly, the removal of the licence fee and the entry of the BBC into the commercial market will remove the shadow of Government dependency and consequent political interference.

More BBC executive time would be concentrated on the quality of BBC1 rather than looking at government concerns, launching new food mags and digital enterprises. Consequently, we would surely see more distinctive programmes like Blue Planet.

Even the funds spent chasing licence fees could be diverted to programming. A strong, straight-talking BBC, generating business for industry would be a good thing for us all.

David Kyffin is managing director, MediaCom specialist divisions

A commercial approach isn鈥檛, in itself, necessarily an issue for the BBC.

Under Birt, and then Dyke, internal commercialism cut the fat, sharpened the focus and clarified the BBC vision. But, the argument goes that if the commercial boys with advertising can do great things in sport, drama, documentaries, reinvent the genre with reality shows like Faking It, Pop Idol, I鈥檓 A Celebrity鈥 鈥 why can鈥檛 the ad model be extended to the BBC? Take a public service which works but isn鈥檛 perfect. Add commercial approaches to how it is funded. Remove it as a financial burden funded by payment from a tax. Take bits of it and allow them to seek a return and investment from the private sector. Prices will come down. Service will improve. It will be easier and cheaper to get to those hard-to-reach places.

It鈥檚 a compelling argument. It didn鈥檛 come true for railways. It isn鈥檛 easy to unfix later on.

You can empirically research the 鈥渃hange is for the better鈥 theory. You could go anywhere else in the world, find your closest version to what equates to a 鈥淏BC with advertising TV market model鈥, live there for a month and evaluate the reality.

I鈥檓 guessing, but based on my only experience of TV as a medium around the world, the reality is that not only will the public broadcasting be not up to scratch, but you鈥檒l be more disappointed with the quality of the output of the commercial channels and the advertisers will be grumbling about the vast bucket-loads of ratings they need to buy to get noticed (cheaper by the metre, but you need more cloth).

The BBC鈥檚 remit is a fundamental part of UK society. The BBC should be willing to nurture talent, ideas and take risks regardless of ratings. This remit cannot be reconciled with advertising on the BBC. You cannot be semiteetotal.

You cannot be almost a virgin.

Despite the protestations of some married men, few wives would consider a snog with another woman as anything other than being unfaithful. The relationship is never the same.

The BBC is already too obsessed with ratings and share rather than its remit. The addition of advertising would create the formal link that BBC programming should be developed and scheduled for the income rather than the idea.

We all bemoan the rise of influence of the auditor and procurement as stifling innovation and investment into the future on our side of the industry. The pursuit of ads and cost per rating would do the same to the BBC.

It is also too simple to believe that ads on the BBC translate into the same programming and more advertising opportunities for less money.

If ad revenues don鈥檛 grow then the purchase of ads on the BBC must take revenues from the commercial sector and reduce their revenues.

Inevitably, this would lead to pressures from their shareholders to cut costs to protect profits.

Programming is the only viable area and the consequences spiral from there.

TV, both commercial and public services, exists within an eco-system. Without a strong non-commercial competitor, the commercial sector as a whole could well migrate toward a more unhealthy status quo.

To optimise profit, you spend to the minimum rather than the maximum. This is already the case in a number of other TV markets, where the guarantee that nearly 100% of viewing is within the commercial sector means investment in programming is cut and commercial clutter increases.

Absolute viewing is maintained, but it is cut into ever-smaller slices. When collectively the commercial sector pursues the same path, rough shares are maintained, profits are optimised, but programming quality ultimately diminishes.

The theory that TV prices would be lower is often counterbalanced by the fact that TV as a medium attracts more share in highly commercialised markets as campaign weights start to creep higher. Achieving awareness, reach or stand-out can only be done via buying more ratings. Cost per thousand may go down, but the capital cost of buying share of voice or effective weights of communication can actually increase.

What the BBC is and does affects all forms of television. It is also a fundamental part of our society, values and culture. We have the best public and commercial TV in the world.

Before we rush out to change the BBC with advertising we should consider the chain of events that we might not be able to stop.

The first cut in the Amazon jungle was in order to generate cheaper wood.

Mark Palmer is managing partner at OMD

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