Ofcom Reviews Sale Of TV Advertising

The communications regulator, Ofcom, has launched a review into the UK's TV advertising trading market.
The review will establish whether the way TV advertising is currently bought and sold prevents, restricts or distorts competition, and whether this has a harmful effect on consumers.
The consultation will close on 22 July after which Ofcom intends to publish a statement in the autumn, which will either be in the form of terms of reference to the Competition Commission or an explanation of why we do not intend to refer the market.
The probe is over the possible prevention, restriction or distortion of competition has the potential to negatively affect both advertisers and TV viewers.
If competition is distorted it may be affecting the allocation of advertising revenues across broadcasters; market innovation; and prices for placing advertisements.
If Ofcom concludes that there are sufficient competition concerns, it will decide whether to exercise its discretion to refer the sector to the Competition Commission by the autumn for a competition investigation into the TV advertising market.
Ofcom has identified transparency of pricing as one issue and said the way TV advertising airtime is sold may make it difficult for advertisers to make meaningful and informed price comparisons between channels and then to act upon them.
On 'bundling' they said that advertising is sold in packages, or 'bundles' and that it is possible that bundling, when combined with the market strength of TV stations, may have a detrimental effect on competition.
There are also concerns on the way in which TV advertising is bought and sold s it does not appear to have altered significantly in nearly 20 years. It is also a system unique to the UK.
Ofcom is considering whether there are barriers preventing the trading model from evolving in response to commercial and technological changes.
"We are seeking to establish the balance of the costs and benefits and if competition is distorted, restricted or prevented then how this could have a detrimental effect on viewers and advertisers," said an Ofcom statement, in June.
(BMcC/KMcA)