The advertising war being fought by the Italian tv networks has turned nasty.
Tactics range from giving exclusive ad deals to counterprogramming ad time. RAI schedules a seven-minute ad break after its immensely popular primetime news. Berlusconi countered with a seven-minute program at the same time to lure viewers away from RAI.
Early this spring, Publitalia – which sells airtime for Silvio Berlusconi’s three webs – circulated pamphlets among the leading daily newspapers and several ad agencies stating that another private web, TeleMonteCarlo, had an audience share of only 1%, not TMC’s claimed 3%.
What really irked TMC execs is that the pamphlet was made to look as though it were written by the official ratings service and used TMC’s logo, said a TMC spokesman.
One TMC exec claims Publitalia is offering clients substantial discounts on rates if clients refrain from buying time on TMC.
“A few of our clients have told us that Publitalia sales reps have offered special discounts for not advertising on TMC. Publitalia always offered discounts to certain clients, but they never tried anything like this before,” said the source, who asked to remain anonymous.
A spokesman for Publitalia denied that the dealer discouraged clients from buying time on TMC, but did say that exclusive contracts have long been subject to a special discount.
“At the ad concessionaires, it’s open war and it’s worse than ever. Sipra gives huge discounts for RAI airtime. We have to fight back,” he said.
Indeed, slashing ad rates, to ribbons has long been common practice at both Publitalia and RAI’s Sipra ad concessionaires, as each vies to under-price the competition by offering a dizzying array of discounts according to client’s frequency and exclusivity in buying air time, political leaning and influence, and other factors.
Discounting ad rates is so severe and endemic that an Advertiser’s Assn.-Intermatrix study published in March cited “wild discounts and fluctuating price lists” as one of the problems plaguing the ad market. While Sipra and Publitalia have been at each other’s throats for years, the aggression between competitors has intensified in the wake of the recently passed broadcasting law.
But that’s nothing compared to what may be in store. Under the new broadcasting law, both Sipra and Publitalia will be losing revenue due to new hourly and daily limits on advertising. What’s more, both will be limited to selling air time solely for their parent company, i.e. RAI and Fininvest. Prior to the law, each concessionaire had several small “satellite” webs that provided them with extra commissions.
It’s hard to calculate how much revenue each broadcaster will lose. Publitalia, for example, will no longer sell airtime for pay-tv channel Telepiu 1 as of August 1991, and will lose about $40 million in turnover.
As a result, the two rival dealers are now going after each fraction of a percentage point with a vengeance. In addition to reportedly offering clients special discounts if they stay off of TMC’s airwaves, Publitalia recently waged a campaign that did little to endear it to the small web, owned by Brazilian giant Rede Globo and Italy’s Ferruzzi group.
Italo companies will spend 4,405 billion lire ($3.5 billion) this year to advertise their products on the country’s national and local tv networks, according to the advertising trade group UPA. Berlusconi’s networks reap about $2 billion of that and RAI accounts for another $1 billion.