Ofcom, the UK’s media regulator, has been consulting on whether to allow public service broadcasters (PSBs) to run more ads in their programmes, and today gave the clearest sign yet that it will loosen the rules governing PSBs’ ad time. In a new round of consulting launched today, Ofcom states that its preferred option is to allow PSBs to run more minutes of advertising on their primary channels.
“Following a call for evidence last year – and having considered the potential impact on audiences and the wider market – we have provisionally concluded that stricter advertising restrictions on PSB channels are no longer justified or proportionate,” the regulator said in a statement.
PSBs’ primary channels (ITV, STV, Channel 4, S4C and Channel 5) are currently restricted to a maximum average of seven minutes of ads per hour of TV. Other channels – PSBs’ secondary channels and other channels not owned by PSBs – are allowed to run up to nine minutes of ads.
Today, Ofcom announced that it is seeking views on two potential reforms. The first would bring the rules for PSBs’ primary channels entirely in line with those for other channels, meaning they could run nine minutes of ads per hour of TV (or 12 minutes total of advertising and teleshopping). The second would bring the rules for PSBs’ primary channels largely in-line with those faced by other channels, while keeping some restrictions specific for PSB channels which limit the number of internal breaks allowed in programmes. Ofcom says this is its preferred option, and under this model, PSBs’ primary channels would still see an increase to nine minutes of ads per hour of TV.
This isn’t quite a done deal. Ofcom added that subject to response, it could still maintain the status quo. But the fact that Ofcom is now only consulting on options which allow PSBs to run more ads, and that one of these options is its preferred choice, suggests it’s likely to green light the increase.
A small increase, a substantial gain
Either of the options proposed by Ofcom, should they be approved, might seem fairly minimal at a glance – two minutes per hour isn’t a huge change. But given that ad time is already fairly limited, it’s certainly significant – it would effectively increase PSBs’ primary channels ad inventory by 28 percent.
That doesn’t necessarily equate to a 28 percent increase in revenues. More ad inventory means more overall supply in the linear TV ad market, which you’d expect to bring down prices. But various studies suggest that loosening restrictions on ad minutes would allow broadcasters to bring in more ad revenue overall.
There’s also the consumer angle to consider – running too many extra ads could put off viewers, reducing audience size and thereby the value of ad inventory.
This, however, is where the jump from seven to nine minutes really doesn’t seem to make much of a difference. Ofcom’s research has found limited awareness among the general public around the difference in ad loads between PSBs’ primary channels and other channels. Consumers also by-and-large appeared not to notice an increase in ad loads after the national period of mourning, following the death of Queen Elizabeth II last year (PSBs lost ad minutage during the period of morning, so were allowed to run more ads in the period afterwards to make up for the loss).
The main change which consumers do seem to notice is an increase in the number of ad breaks – hence why Ofcom says it would prefer to keep these limits in place.
