Media strategists advise CRTC not to alter 12-minute rule » Media in Canada

Media strategists advise CRTC not to alter 12-minute rule

As the federal regulator of Canadian broadcasting wound up its first major television hearings in seven years this week, controversy swirled in the mediaverse. Should the rule limiting TV commercials to 12 minutes per hour be loosened or even scrapped? Some networks say yes. But the ACA and several leading media strategists say either course would be a disaster.

For denizens of Canada’s mediaverse, one key question emerged from the dense clouds of words spoken in Gatineau, Quebec, over the past two weeks, as the Canadian Radio-television Telecommunications Commission (CRTC) held its first major television hearings in seven years. That question is whether the federal broadcast regulator should alter its longstanding rule limiting TV commercials to 12 minutes per hour.

Predictably, most of the network reps said yes. CTV even called for abolishing time restrictions altogether. The nets’ rationale for seeking permission to run more ads was probably best expressed in a statement by Peter Viner, president/CEO of CanWest MediaWorks. ‘Broadcast regulation was made at a time when consumers had access to just a few channels, and the bargain was that a complex set of rules and obligations would be put upon broadcasters in exchange for their use of scarce spectrum on the airwaves,’ he stated.

‘Today, with hundreds of channels in cable and satellite homes and unlimited competition from the Internet, which is unregulated, one side of the equation changed, while the other did not. We seek to remove or reduce unnecessary costs and limits on revenue generation in order to rebalance the equation and to untie broadcasters’ hands to allow us to meet the competition head on,’ Viner concluded.

So, should the CRTC accept that argument and increase the 12-minute limit? No way, says Sunni Boot, president/CEO of Toronto’s ZenithOptimedia agency. ‘We’re trying to get more eyeballs, not less. One of the issues for us as advertisers is clutter, and we do not believe that increasing messaging adds any value to the viewing experience. And if you don’t add value to the viewing experience, you’re going to turn the viewers away. So I don’t see any need to increase the number of ads. We are at the maximum now.’

Ditto for Toronto-based Steve Arnovitch, investment manager at Starcom Mediavest Group. ‘Increasing the amount of commercial minutes is probably not in the best interest of the viewers. Effective commercials and communication to consumers are of the utmost importance. But I think viewers are going to tune out if more commercial minutes are added in.’

Hugh Dow, president of Toronto’s M2 Universal agency, agrees with his colleagues. ‘Much as I would like to see an expansion of commercial inventory, and the resultant moderation of cost inflation, I would not like to see an acceleration of commercial avoidance.’

The same point was also made by the Association of Canadian Advertisers, which testified on the final day of the hearings. Speaking as both the chair of ACA’s broadcast committee and VP marketing assets for Molson Canada, Judy Davey warned that increasing ad clutter would not just alienate viewers, but ‘only encourage (them) to seek out ways to practice commercial avoidance’ via ad-skipping devices.

And the ACA was explicit about why the opinions it expressed to the CRTC should be heeded. ‘Our members – over 200 companies and divisions – represent a wide range of industry sectors, including manufacturing, retail, packaged goods, financial services and communications,’ the Toronto-based association pointed out in its statement to the commission. ‘They are the top advertisers in Canada, with collective annual sales of close to $350 billion,’ which translates to ‘an annual investment of almost $13 billion in the Canadian economy. Of this, approximately $3 billion is invested annually in television advertising, representing about a 23% share of total ad spend.’

But the unanimous thumbs down on increasing TV advertising from the non-network side of the table does not equate to a complete endorsement of the status quo in terms of brand exposure on television. What media strategists are in favour of, they tell MiC, is further development of the non-advertising opportunities technology has presented to marketers in recent years. These include everything from virtual product placement to the calibre of integrated sponsorship enjoyed by Kraft Canada during the recent Hockeyville series and Home Depot Canada during Debbie Travis’ From the Ground Up.

That such fare should not be counted within the 12-minute rule is the one thing broadcasters and media strategists agree upon. The ACA urged the CRTC ‘to refrain from any attempt to reclassify this non-traditional program-integrated type of advertising as part of the 12-minute-per-hour limitation.’

The CRTC’s decision revealing which side of the arguments about television advertising it favours is expected to be announced some time next summer.