The practice extends a client contact strategy the company has had in place for some time, but rival broadcasters and senior agency executives are claiming its bid to negotiate deals direct with clients is a step too far.
It is understood that, within the past three months, ITV has offered some advertisers further discounts for additional spend across its portfolio. ITV already has a direct deal with coffee brand Douwe Egberts, part of food giant Sara Lee. It has been attempting to seal a deal with Birds Eye and Asda, although it is not yet known if a deal has been reached with either. Birds Eye and Asda declined to comment.
Such deals direct with clients are not illegal and fall outside the scope of CRR - the mechanism that governs the price of ITV's airtime. But some are concerned they have the potential to impinge on the agency deals that underpin the bulk of TV ad trading. An agency deal is a type of agreement between a media buyer and a particular channel or sales house, where the agreement specifies that media buyer's share of budget and the discount level it will receive in aggregate. These are in contrast to "line-by-line" deals that are specific to individual advertisers.
The head of a rival TV sales house warned: "I am concerned about this. We all trade at an agency deal level in terms of share. But what ITV is doing is going direct to advertisers and saying ‘we are better than the agencies, say we are and we want you to put much more spend into us and we will give you X, Y and Z'."
According to one agency boss: "You could quite easily conclude that it challenges the entire business model TV trading is based upon."
ITV declined to comment on specific clients, but said: "Having close relationships with our clients is vital to our business and we make no secret of that. Close client links have been part of our thinking for some time: we have had a client development team set up for two years.
"It makes good business sense that our clients understand at first hand the range of products and ser-vices that ITV can deliver and how we can work together more closely."
TV share deals History of ITV's plan to forge closer client links
ITV has been engaged in fostering closer client links for some time.
The broadcaster has been keen to revise the profile of ITV at boardroom level to persuade advertisers to spend more with ITV.
Last year, it emerged that Rupert Howell, ITV managing director of brand and commercial operations, had been selling ITV ad opportunities directly at chief executive level to some of the UK's biggest advertisers, including Marks & Spencer and Sainsbury's.
When confirmed in the role in 2007, a key part of Howell's job brief, one that was broader than previous commercial director Ian McCulloch, was to forge direct relationships between ITV and clients.
Many are not overly concerned by ITV's efforts. Its attempts to get certain clients to divert spend from other media, particularly press and outdoor, has been widely acknowledged as good practice in a tough climate. However, not everyone agrees.
But Chris Hayward, head of investment at ZenithOptimedia, said: "These dialogues don't represent anything more than relationship building.
"ITV is in the business of generating ad revenue and will do what it needs to get that, but, if it is not damaging the agency relationship, there is no reason to be concerned."
ITV has cut a series of ad-funded programming deals, such as one with Red Bull for the Red Bull Flugtag last year, although even Howell admitted at the time of the deal that AFP activity was currently "small beer, as they are difficult to pull off".
In September, ITV looked to enhance its client credentials by unveiling plans to reshape its commercial operation, led by the creation of agency-focused teams, a new creative solutions division and the rebrand of ITV Customer Relations as ITV Commercial. As part of those changes, Simon Orpin, formerly integrated planning director was named creative solutions director.
What the clients spend
- Spent £80.5m on media during the 12 months to 28 February
- Spent the bulk of this, £48.7m, on press, followed by £29.3m on TV
- Media spend is handled by Carat
- Spent £1.2m on media during the 12 months to 28 February
- Spent the bulk of this, £1.1m, on TV, with £53,000 on press
- MG OMD handles its UK media as part of its work for the coffee brand's parent Sara Lee
- Spent £11.6m on media during the 12 months to 28 February
- Spent the bulk of this, £8.4m, on TV with £1.9m on press and £0.9m on radio
- UK media is handled by Carat
Bob Wootton, director of media and advertising affairs, ISBA
"The purchase of com-mercial airtime on TV, not least ITV, is a very serious business with some serious money at stake. If deals are no longer transparent, it could seriously impact agency deals. It's important to state there is nothing wrong with ITV talking directly to its end customers. The problem is not what it is doing, but it could be in how it is doing it.
Geoffrey Russell, IPA secretary and director for media affairs
"While we recognise the right of media owners to speak directly to advertisers, we are concerned when this occurs without previously informing the advertiser's media agency. This is not only for courtesy, but also to allow the agency to be present - if the client so wishes - in order to help in the evaluation of any proposals that might be made."