Are broadcasters set for U-turn over trading reform?

The long preamble to Crimbo sees the reappearance of long-lost TV advertising friends - the retailers with their upbeat seasonal themes (this year's Boots and M&S executions are splendid in my view), Ferrero Rocher and those obscure liqueurs beloved by all grannies. Then there's the George Foreman Grill - how do dads manage to hide their dejection when unwrapping that prezzie. Does it ever get used more than once?

With demand, and prices, high at this time of year, regular brand advertisers take a seasonal break, creating a different shape to TV advertising schedules.

This year, it's not just the pre-Christmas period when the advertising shape has diverged from the norm. In a World Cup year, broadcasters' budgets were built on the expectation of benefiting from lots of lovely premium price ads targeting hard-to-reach men who watch sport on TV and not a lot else. Of course that didn't happen and the summer was a depressing time for TV traders. But the problem has continued throughout the year. Relatively strong spending by FMCG and toiletries brands could not compensate for the comparatively low spending of beer, motors and finance advertisers.

So, as broadcasters do their end of year totting up, several realise they have accumulated a trading debt. Their dilemma is how to recover that deficit with advertisers in 2007.

The prospects for paying back advertisers through higher audience ratings for shows next year look gloomy, particularly for the terrestrials. IPA trend figures show that average daily viewing hours fell year on year for the seventh successive quarter in Q3.

The alternative, raising prices, looks equally fraught with difficulty. Channel 4 has been the first to show its hand, announcing a 5% price hike, but media buyers say even C4, which has the strongest trading proposition, has a fight on its hands to get any increase in this winter's trading round.

This impasse is causing broadcasters to revisit their previous opposition to TV trading reform. There even seems to be a consensus forming for the scrapping of CRR, blamed for much of TV's trading ills.

A year ago, broadcasters and TV buyers saw off Ofcom's attempts to modernise a system built for the environment of the 1980s and introduce transparency to the murky world of TV trading. What a U-turn it would be if broadcasters now started beating a path to Ofcom's door demanding such reform.

Colin Grimshaw is the deputy editor of Media Week.

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