MEDIA SPOTLIGHT: Will multichannel's rise force TV trading to change?(Television)(planning of advertising media)

The present trading system undervalues multichannel homes, Jeremy Lee reports.

The fundamental dynamics of TV trading have changed little over the past decade. Advertising revenue follows audiences, with those channels that are able to provide a large audience (and therefore the ability to build instant mass cover) able to charge a premium.

This has been good news for the terrestrial broadcasters, which have a larger reach and get larger rating programmes, and bad news for the multichannel players who, with a limited reach, can generally only supply ratings in single figures and below.

However, the confirmation last week from Ofcom that multichannel TV penetration has broken through the 50 per cent mark, giving viewers access to 380-plus digital channels on offer, shows that the continued fragmentation of audiences cannot be ignored.

Under the existing TV trading model, agencies adjust their plans according to their target audience. But the terrestrials are still able to command a premium for programmes such as Coronation Street that achieve a mass audience.

However, agencies are also increasingly being forced to use their discretion when planning campaigns. According to Mark Holden, the executive planning director at PHD, the growth in opportunities is forcing buyers to become more developed implementational planners. 'In the past, TV has been seen as a blunt tool. With segmenting audiences, it has become much more targeted,' he says.

The Flextech sales house ids, which represents the UKTV suite of channels, is trying to start a debate to move the planning and buying model on for the multichannel age.