Media Week

Last week's relegation of his beloved football team, Charlton Athletic, to the third tier of English football marked the beginning of a tough few days for ITV executive chairman Michael Grade.

Perhaps this was the final straw that prompted him to bow to share­holder pressure and announce he will leave his ITV post early, but stay on as a non-exec.

The week culminated in frenzied speculation about his successor at the UK's most iconic commercial broadcaster, encompassing internal options John Cresswell, Rupert Howell and Peter Fincham and numerous external candidates such as Five's Dawn Airey, former Channel 4 chief executive Michael Jackson and - seemingly - Uncle Tom Cobley and all.

Grade joined ITV in January 2007 and immediately injected a new feel-good factor into the company. But it quickly became apparent the job wasn't quite what he signed up for. Pension deficits, loan commitments and an ad revenue-trashing recession equalled a £1bn-plus headache that made it impossible for him to implement his strategy.

Grade said goodbye to commercial chief Ian McCulloch and programme head Simon Shaps, bringing in a "dream team" of Howell, Fincham, Carolyn Fairbairn and Dawn Airey. The first cracks appeared when Airey abruptly jumped ship to Five. Then Grade's content-led recovery plan and online and global revenue targets were replaced with cuts as the recession kicked in.

Grade made progress on the regulatory front, with an impending relaxation of ITV's public service broadcasting requirements and easing of contract rights renewal the result of strong and effective lobbying, although the suspicion remains the Government almost felt sorry for the broadcaster's plight and realised ITV was in danger of disappearing completely if something wasn't done.

When I interviewed him for Media Week TV in September 2007 (www.mediaweek.tv), Grade presented ITV.com as a "world-class" website and Friends Reunited as having more longevity than Facebook, plus an ability to charge. Both statements look fatuous in retrospect.

But it's not down to Grade that ITV is in the state it is - the fault lines stretch back long before his tenure. He gave it a shot but was unable to sprinkle his stardust over the broadcaster. Whoever tries next needs a clear vision about what needs to be done and the freedom to implement it - unencumbered by Grade's lingering presence.

The focus has fallen on regional media in an unprecedented manner recently. Last week's Digital Media Summit kept the issues squarely in the spotlight, attended by political heavyweights including PM Gordon Brown and business secretary Peter Mandelson, and industry bigwigs such as Mirror Group's Sly Bailey.

It dovetailed with the submission to Lord Carter's Digital Britain process of former GMG Radio chief executive John Myers' report on local radio, previewed in Media Week last week, and the recent report to the Office of Fair Trading about local media ownership rules by the Local Media Alliance - headed by outgoing Johnston Press chairman Roger Parry.

The latter submission is particularly interesting, especially in a week when Gannett-owned Newsquest posted a shocking 60% year-on-year decline in property classified revenues. The LMA is an ad hoc alliance of seven of the largest regional newspaper publishers and the Newspaper Society, set up in February to lobby for the relaxation of local media ownership rules. It was an expedient measure to get the process moving quickly and meet tight deadlines imposed by Carter's initiative.

The early consensus was that, if ownership rules are relaxed, the industry would rationalise into two or three regional media supergroups, with consequent concentration of titles, centralisation of systems and printing facilities.

But, behind the scenes and separate to the recession that makes access to M&A finance problematic, major regional newspaper owners don't see it quite like this. They want to use a relaxation of rules to cluster their portfolios in a multimedia shape that makes sense on a regional basis and brings audio and video firmly into the content mix. It will be horse trading rather than wholesale sell-offs.

The BBC has been headed off at the pass after its plans for local online video services were blocked last year. But regional media faces a new threat from local councils producing their own papers and publishing planning notices there rather than in local papers. "Newspaper" no longer adequately sums up what local media brands must evolve into if they are to survive the recession and structural changes ahead.

Audiences still want local content, but there is increasing competition to provide it. Traditional newspaper brands have to demonstrate they are still best-placed to give local people what they want - when and how they want it.

No one in London can fail to have noticed the vast increase in digital out-of-home media in recent years.

Clear Channel's iconic Piccadilly site and Titan's Transvision screens on railway station concourses blazed the trail, as did CBS Outdoors' escalator panels, six-sheets and cross-track projection screens in Tube stations.

Then there are the impressive Torch special build and 48-sheet screens on the main arterial roads into town and numerous digital panels at Heathrow Terminal 5 and Westfield shopping centre. And digital outdoor is not confined to London, with the City Gateway Tower in Manchester, Ocean's LED media wall in Liverpool and Forrest's CityScreens in Glasgow and Manchester. Add this to taxis, toilets, health clubs and cash machines and there are plenty of DOOH options for advertisers. Yet, despite all this, digital outdoor still only represents 7.1% of overall out-of-home advertising spend.

Last week's DOOH Media Summit at Olympia, in association with Media Week, provided an excellent opportunity for the industry to debate the challenges DOOH faces in its second phase of growth. The case studies presented emphasised that DOOH can deliver advertisers meaningful connections or exchanges with consumers in a tailored and flexible fashion, epitomised by day-part campaigns.

But Samsung's Gerry D'Angelo cautioned that it is still difficult for clients to justify the extra investment necessary to produce a DOOH campaign. He called for more measurement and proof of ad effectiveness, though was momentarily stumped when one wag suggested Samsung should lower its digital screen prices to boost take-up.

There won't be the same capital investment by out-of-home media owners in the next 18 months, due to the high cost of rollout and tough economic conditions. The big outdoor media owners also have to balance protecting their existing "traditional" inventory with pushing digital opportunities aggressively: two objectives that aren't necessarily mutually compatible.

No outdoor specialist would bite the bullet and estimate the percentage of spend DOOH needs to achieve to reach the scale that will bring costs down, though Mark Middlemas at UM suggested 10% as a realistic share to aim for in the next year or so.

In the meantime, agencies must make sure they produce bespoke creative and planning for digital outdoor, while integrating activity in overall campaigns from the start.

I recently received a copy of an e-mail that had been sent out by a press buyer at a top five UK media agency that made for intensely depressing reading.

The e-mail, submitted anonymously by a disillusioned sales rep at a weekly magazine, was sent out to the reps at news weeklies. It outlined the tough trading conditions the buyer's agency was experiencing and that one of its large clients had cut its budget for Q2 2009. It basically went on to say that ads would only be booked for this client in titles that could offer further discounts on rates from Q1. The best deals would determine who made the schedule. End of "discussion".

I suppose it's a sign of the times. Clients - and, by extension, their media agencies - are reacting to pressures in their own markets by putting the squeeze on their suppliers. But they are also using the economic downturn as a negotiating tool because they know they can. And, as media owners are at the end of the food chain, they are the ones bearing the brunt of the pain.

A sign of the times it may be, but there are ways and means of doing things. If this media buyer follows the tactic of no debate, no brief, no negotiation and - most importantly - no media planning, isn't he effectively putting himself out of a job in the long run? If his role has boiled down to sending out round-robin e-mails asking who's going to give him the biggest discount, then agencies might as well go the whole hog and do all their negotiating via automated trading platforms such as MediaEquals and hang the consequences.

What happened to smart media planning and placing ads in the correct environment for each individual client? What happened to adding value and providing a professional service within which price is just one element?

The variety, choice and richness of UK media have long been its strength. But if agencies act like this and do business purely on price, the media landscape will be far more anodyne and mass-market oriented when we do come out of this recession. And it will be much diminished for it.

The Sun became the most popular UK newspaper online for the first time in February, registering an eye-watering 27.3 million unique users, according to ABCe figures.

The site, which includes sister title News of the World, benefited from high-profile celebrity stories such as Jade Goody's illness and classic tabloid fare such as 13-year-old Alfie Patten and the "Is he/isn't he the father?" tale.

Its unique users were up by five million compared to January and more than doubled year on year. By anyone's standards, the traffic attracted by UK national newspaper brands is impressive, although there is always the caveat that between 50% and 75% of it typically comes from overseas - only 8.3 million of The Sun's traffic is of UK origin, for example.

The Sun is looking to build on its success with a newly constructed £1m TV and radio studio at Wapping, which goes live with its first radio show, the Jon Gaunt-fronted Sun Talk, on Monday, 21 April, featuring Conservative Party leader David Cameron as its first guest. The plan is for News International journalists to generate audio and video content across all its titles and participate in live broadcasts.

However, the acid test will be the amount of income generated, for if newspapers are to have a long-term future, they must start making money out of their massive online audiences. For example, it is understood headline sponsorship of Jon Gaunt's Sun Talk was on offer for just £60,000, which is hardly going to replace the display and classified ad revenue haemorrhaging from NI's print coffers.

Other pertinent questions include: is overseas traffic any use to advertisers and, by extension, media owners? Can consumers be persuaded to pay for premium content, such as dating, mobile updates or fantasy football? Is traffic generated by clever search engine optimisation delivering audiences that are at all relevant to newspaper brands and their advertisers?

It's early days and it makes a change to be talking about positive and proactive developments when it comes to newspaper companies - for which The Sun should be applauded - but, ultimately, no one has yet crossed the threshold and turned innovation into hard cash.