Broadcasters in talks to raise TV ad limits

TV advertising limits could be relaxed to counter streaming competition

The government is reported to be in consultation with broadcasters on the possibility of lifting the current cap on how many ads can be shown per hour of TV content.

The radical move is being contemplated amid increasingly fierce competition from streaming services which have been steadily eroding the market share of mainstream broadcasters.

To compound, this effect advertising revenue has increasingly migrated to online rivals such as Facebook and Google, a pincer movement which led ITV to report a 5% decline in its ad revenue last month while Channel 4 remains becalmed.

The most recent cross-industry figures show TV advertising revenues across Britain as a whole fell by 3.3% to £2.4bn in the first half of the year as a result of this pincer movement but any move to increase advertising will have to be handled with caution, at risk of exacerbating audience declines.

Existing rules set out by Ofcom limit Channel 5, ITV 1 and Channel 4 to just seven minutes of advertising per hour, rising to between eight and 12 minutes per hour during prime time. Other less mainstream commercial stations are permitted to broadcast 9 minutes of advertising per hour.

This is significantly tighter than the equivalent European restrictions where commercial broadcasters are limited to 12 minutes of adverts per hour.

Matt Rhodes, head of digital and content strategy, Engine, said: "That more than half of the time spent watching ITV is on just ten properties suggests that there is a restricted opportunity for brands to buy advertising (and for ITV to sell space) that reaches a mass audience. Their options are either to fill their airtime with more of these properties (such as increasing the frequency of Coronation Street in a week) or putting more ad time into these programmes. They seem to want to experiment with the latter, although we know from the same Ofcom report that viewers are complaining more about the length and frequency of ad breaks. So the last thing brands want is to be associated with advertising that is annoying to viewers on TV in the same way we have seen on other platforms.

"The other way of increasing the ad opportunities is to grow more specialist properties. Love Island is the obvious example of this – it offers an opportunity for brands to reach a younger audience they just can’t find in other programmes. Increasing this to twice a year makes sense to ITV to increase the opportunities for brands to reach audiences and for ITV to raise ad revenue. But it doesn’t just have to be reaching this young audience. ITV could also grow more tailored packages of programmes for brands who want to reach different segments of people to sit alongside the mass audience reaching programmes."

He concluded: "Maybe the solution isn’t longer ad breaks in these popular programmes (which we know will annoy the viewers) but a more data-driven packaging of programmes and better matching of creative to more tailored and specific audiences that can be reached at different times and in different contexts."

Channel 4 recently trialed an ad-free All4 service by inviting viewers to pay for the privilege with a premium service more akin to BBC iPlayer or Netflix.

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