Marketing ITV – it’s all about content, stupid!

July 15, 2010

Does marketing really belong in the commercial department? Not according to ITV’s new bosses, who have just made it a subset of content creation.

How serious they are about the proposition is, of course, a matter of debate. At one level – the level of employment lawyers – what’s going on looks suspiciously like constructive dismissal. Change the senior reporting structure in a company and you potentially diminish the authority and budgetary power of those who are “reorganised”.

That’s certainly one interpretation of the imminent departure of group marketing director David Pemsel and head of research Chad Wollen, announced yesterday afternoon. Only a week ago, it emerged that marketing and research, hitherto separate and under the control of the commercial department, were to be integrated and rerouted to content czar Peter Fincham (aka director of television, the chief commissioning role).

The conspiracy theory gains traction when we consider what else has been happening at ITV recently: chiefly the sacking of most of the old guard. After commercial director Rupert Howell fell on his sword and was replaced by Fru Hazlitt, we have had a very crowded departure lounge. Studio bosses Lee Bartlett and Remy Blumenfield are queueing at the exit, as is online director Ben McOwen Wilson.

And that’s just scratching the surface. Underneath, a full-scale cleansing of the Augean Stables is underway, as chairman Archie Norman and chief executive Adam Crozier take a pitchfork to the “shambles” (their word) of the Michael Grade regime. Humiliating psychometric tests applied to the 120 senior managers who remain add a defining touch to this melancholy picture. (I bet Crozier wishes he could have applied those self-same tests to the board of the Football Association during his tenure as chief executive – now there’s an organisation that really isn’t fit for purpose.)

Yet none of the above is inconsistent with implementing a strong, alternative, strategic vision; some of it already apparent in the quality of new senior hirings. Hazlitt is widely viewed as an inspired choice to succeed Howell. Her natural enthusiasm and client-servicing skills should help to repair damaged relationships with media agencies. She also “gets” digital (just as well really). Mind you, how she will co-exist with Gary Digby, master of the dark art of  TV trading, is a moot point.

Moreover, vesting more power with strong programme-led talents such as Fincham and Kevin Lygo – poached from C4 and now head of production (or ITVS, as it is called) – surely makes a lot of sense. The Grade regime talked a good game about improving the quality of content, but in reality it was fixated on refurbishing a brand built around yesterday’s trading system.

Witness the amount of corporate energy spent in repealing (fairly unsuccessfully, as it turned out) the Contract Rights Renewal (CRR) regulatory straitjacket encasing its main, analogue, channel – ITV1. Just to put things in perspective, here are a few statistics. When in 2003 Carlton and Granada merged to form ITV, the flagship channel’s share of the commercial television audience was 43%. By the end of 2008, it was 28.5%. Add in ITV’s (relatively neglected) digital channels and the figure rises to over 40% again. And yet, ITV has singularly failed to monetise that digital presence. Last year, online revenues were only £35m, up from £23m in 2006.

I’m not necessarily saying the Crozier/Norman 5-year plan will work– maybe nothing can at this late stage. But at least it represents a reality check firmly breaking with the nostalgia of the past. Superior programmes, especially hit shows that travel effortlessly across the multimedia and geographical landscape, are the only way ahead. In that sense, putting marketing at the service of the creative department is a no-brainer.

Rupert Howell calls it a day at ITV

May 27, 2010

The departure of Rupert Howell, managing director brand and commercial ITV, cannot have surprised anyone. He was simply too close to the tainted heritage of Michael Grade, formerly ITV executive chairman, to survive.

The chemistry of the new regime won’t have helped either: too many alpha males scrabbling for power in the boardroom. In that sort of environment, Howell definitely looked the weaker species. In Archie Norman he had to contend with a more commercially astute and interventionist chairman than his predecessor, and in Adam Crozier, a chief executive who had himself been a media man and advertising executive (with no doubt firmly entrenched views on how the business of TV sales should be conducted).

Moreover, Howell’s three year career at ITV has been chequered. He can hardly be blamed for presiding over ITV’s worst-ever sales slump, but he can be held to account for his poor relationship with media agencies. Howell, in a way, showed his age (about 53) in his refusal to deal with anyone but the top man. You can’t act that way with 27-year old media buyers these days – especially if you represent the diminished ITV brand.

So, high-handed and to a certain extent out of touch with the times. But Howell is nothing if not the Marmite media personality. Against his faults must be balanced great politicial skills. And there are many who admire him for his entrepreneurial drive, in the past. One of the most successful new business directors ever, he went on to found one of the most renowned advertising agencies, Howell Henry Chaldecott Lury – which, in the early nineties, really was cutting-edge.

I doubt that he will (even if he wants it) land another big job in media. There are plenty out there who understand the landscape better, but are having a hard time of it. Malcolm Wall, for instance. A move back to the world of agency networks (he was once regional director of McCann Erickson Europe) seems more likely and has more mileage in it. Literally. All that hopping in and out of aeroplanes must be murder. But the pay is good, and Howell would excel at the politics. He’s not afraid of a hard day’s work, either. Good luck to him.

Low Grade performance at ITV

October 17, 2009

GradeIt’s a bit rich of Michael Grade, outgoing chairman of ITV, to blame the media for a mess substantially of his own making.

Here’s a sample of Grade in action. Asked by Lord Fowler, chairman of the House of Lords communications committee, whether he was surprised about the length of time the process of finding a successor was taking, Grade replied as follows:

“What surprises me is the extent to which this has been played out in the public arena, which is unfortunate. We are certainly not short of advice from our colleagues in the fourth estate. Coming into work each day, I feel as though I am inhabiting a parallel universe…the ITV business is going very well.”

Really, Michael? If it were going that well, you would still be in a job and we would be deprived of a riveting media circus, featuring acts of startling incompetence by leading ITV executives, non-executive directors, head-hunters and, last but not least, ITV shareholders. Thank goodness some of the people below board level seem to know what they are doing.

Unpicking all this: once Grade’s ‘high-production value’ strategy was poleaxed by the recession, he was toast. Herein lay the first problem, because he then proved as amenable as a sea anemone asked to vacate its favourite rock at low tide. All right, he’d give up day-to-day management as chief executive, but he was going to cling on to being chairman come what may, albeit of the non-executive variety.

Grade’s contempt for corporate governance (the Higgs Report specifically calls for the roles of ceo and chairman to be split in public companies) is a lesson for us all and Sir Stuart Rose at Marks & Spencer in particular. Allowing Grade to combine the two roles in the first place was a fiasco in the making for which the ITV board and shareholders must also bear responsibility.

We are now seeing the results of that misjudgement played out. Grade, in staying on, evidently hoped to persuade some youngish, pliable patsy with digital experience to be chief executive, while he continued to lord it over the board. Simon Fox, ceo of a resurgent HMV, self-evidently had the digital experience, but proved no one’s patsy when he turned the job down. Matters were not helped at this juncture by a group of self-appointed ‘activist’ shareholders (Legal & General, Brandes and Fidelity), who insisted on having Tony Ball as ceo come hell or high water.

Ball is an able executive, who did well at BSkyB. But there were two things wrong with his candidature from the start. To begin with he is very greedy. His demands (a package of up to £30m over 5 years was reported) were politically unacceptable in the present climate and caving in to them would have made Sir James Crosby, the ITV non-executive director charged with finding a Grade replacement, look even more foolish – if that were possible in the wake of his ill-judged escapades as HBOS chief. Then again (not that this troubled our militant shareholders), no one who actually worked at ITV seemed to want Ball. Why? Because it would be like letting Alaric the Goth into Rome: after comprehensive sacking, the place would never be the same again.

As it turned out, these anxieties were academic. Ball over-reached himself, not only with the grossness of his financial demands, but in his determination to put his stamp on Grade’s successor as non-executive chairman. Only then did the ITV board and Russell Reynolds the headhunters seem to wake up. They’d got it all topsy-turvy: sure, they needed to replace Grade, but it was the wrong Grade they were replacing. Grade the chairman should have preceded Grade the ex-ceo. Duh! At least Grade has now had the grace to do what he should have done months ago: step down unequivocally.

Has the selection “committee” learned anything else from its mistake? Not really. Shareholders still seem set on a deluded course of appointing a chief executive whose brief is to be “anyone but ITV chief operating officer John Cresswell or any other ITV insider.” If I were Cresswell, I too would be leaving – having been bridesmaid at too many weddings.

Which is unfortunate, since Cresswell is rapidly emerging as the only sound candidate for ceo by default. Anyone who, like me, has grown a little confused about who remains in the race would do well to turn to Mediaguardian, where they will find a handy visual device entitled The Big Cheese Chart. It’s a perceptual mapping graph that plots the fortunes, or otherwise, of those who are contending for the crown jewel roles at ITV and Channel 4. To outward appearances, the process of digging ITV out of the mire looks stalled. All the credible City types selected by shareholders as suitable chairmen have ruled themselves out, with the exception of former BBC chairman Sir Christopher Bland. And without a chairman, there can be no hope of a chief executive either.

Interestingly, given the unpromising turn of events, ITV’s share price has soared 16 % this month – well above the market average. I would put this down less to the fact there is about to be a resurgence in the media sector’s fortunes and more to the fact that ITV has become such a basket case that only a takeover of some sort can solve its problems.

The question is, who would want to take it over? Whoever these people might be, they’ve already missed a bargain-basement opportunity, when the ITV share price was in the low 20ps earlier this year (it’s now back to about 50p). And that’s not even to consider any other obstacles in the way. Such as: ITV no longer has a USP, it has no credible digital strategy, a huge pension deficit and an over-manned sales force.

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