The European Advertising Market between innovations and the waiting for the new legislation

Katty Roberfroid, Marketing and Content Director at egta (European association of television and radio sales houses), based in Brussels, had and extensive chat with the director of this magazine, Amanda Ospina. Director of Regulatory and Public Affairs, Bertrand Cazes, also joined this exclusive interview with ONLY TELENOVELAS, Fiction & Formats. They spoke about the situation of the European advertising market, its crisis and height; the future regulation and the impact of new technologies and formats.

For large campaigns, almost everything is carried out through the media agency, which still is an indispensable partner although the situation is evolving slightly with sales houses now proposing some concepts and ideas directly to the advertisers to help them design the best possible communication campaigns.

The impact of the European Community
What changes is the sector undergoing in the European Union context?
The countries affected the most by the modifications were the Eastern ones, which have just joined the European Union. They used to have much more flexible regulations – less strict and not so accurate. They had to change and adapt to the European Union’s regulations which meant for them new hurdles to the business. The other major challenge for European advertising sales houses is the take-up of new media which is very appealing to advertisers that are looking for different ways to reach consumers: the Internet, user-generated content web sites such as YouTube, mobile phones but also IP television and mobile television. Advertising on these new platforms was not regulated thus putting advertising on television has a competitive disadvantage. To a large extent, audiovisual commercial communications will in the near future be also regulated.

There are many other debates in the European Community that affect advertising, restrictions on the advertising of alcoholic beverages, advertising for pharmaceutical products, etc. In this context, it is egta’s responsibility to represent the opinion and interests of all broadcasting members in order to do all it can to avoid regulations that we find useless or not good for the business.

Television without frontiers
The European Parliament is presently finishing the revision of a piece of legislation called “Television Without Frontiers”. The new legislation now called "the Audiovisual Media Services Directive" should come into force towards the end of 2007, though countries will have up to two years to implement it. According to Katty Roberfroid, stricter regulations had to be avoided at all cost as they would only disrupt the advertising market and in turn mean less capacities of investments in programming for utive. Among other reasons, the recovery was possible thanks to the fact that "several countries are developing new formats; they are trying new things. Advertisers have a tendency to want to move away from traditional advertising strictly speaking and to invest in program contents," she says. Global advertisers and broadcasters. The executive exemplifies: "During the debates, there were lots of discussions on new advertising bans, additional restrictions to the insertion of advertising and advertising formats. Fortunately, these dangers were avoided and the future legislation will be more flexible and make it easier for sales houses to offer good and creative advertising to the advertisers." There are still some difficult issues, for example, the use by broadcasters of Premium calls that the audience is invited to use as a chance of winning a prize could be considered as gambling. This could represent huge losses in terms of advertising in comes because in many European countries gambling activities are state monopolies and would thus not be acceptable on television. This is just an example of where a trade association like egta is important to represent the interests of its members and help them defend their revenues against regulatory threats.

Stepping out of crisis with formats
"From 2000 to 2004 the industry has experienced some difficulty, especially after the very good results of the year 2000. But since 2004, the situation has started to improve in most countries," explains the executive. Among other reasons, the recovery was possible thanks to the fact that "several countries are developing new formats; they are trying new things. Advertisers have a tendency to want to move away from traditional advertising strictly speaking and to invest in program contents," she says.

Global advertisers and sponsored contents
It is a trend all over Europe, since entrepreneurs have become "global advertisers". Austria was among the first to sell product placement, which consists in displaying the product inside the content. Besides, many advertisers have increasingly become interested in advertiser-funded programming, even if their names do not appear in them, so as to have another kind of impact.

Meanwhile, Germany has also taken a number of innovative initiatives even with- out waiting for the new legislation. For four years it has been creating new formats and new advertising methods like the split screen, which consists in dividing the screen into different parts where you can broadcast the show while placing advertis- ing in other parts of the screen. Austria and Germany "have proved that innovations generate additional capital without damaging the television image," states Roberfroid.

Less loyalty to networks and more appeal to programs
According to the expert in the European advertising industry, faced to a field that changes continuously in terms of technological aspects, regulatory frameworks and formats, the most important thing is "to watch everything that is going on in the business, follow the technologies and be capable to offer a portfolio of possibilities that is considerably more important than before, being able to satisfy the advertisers." There is only one goal, and it is pursued by everybody: to attract audiences and potential clients. Roberfroid explains that viewers have a tendency to change their loyalty from the TV channel to the programming choice, regardless of which channel is airing what. Considering this outlook, the executive advises being on the alert for changes and innovations. "The important thing is to follow the trends to see where and how to diversify, in order to keep the income and satisfy the advertisers," she concludes.