MediaCom Scotland and Feather Brooksbank, as well as Happy Hour Productions, have hailed The Competition Commission’s rejection of proposals by ITV to have more flexibility over its ad charges.

ITV was looking to change the Contract Rights Renewal  (CRR) which controls how much the broadcaster can charge for advertising slots, which was put in place to prevent the broadcaster from dominating the marketplace.

ITV has argued that with the rise in the number of broadcasters, due to the advent of digital, the regulations should be changed to allow it to vary pricing – but the commission ruled that there were ‘too many uncertainties’ about ITV’s proposal.

Fears were that had the proposals been upheld, the price of advertising would have escalated.

ITV is still expected to launch two new digital channels ITV+1 and ITV HD which will be included in its viewing figures, which could also mean that it’s advertising prices will rise when calculating media costs.

Sean Japp, head of TV at MediaCom Edinburgh said that the Contract Rights Renewal (CRR) was put in place to protect advertisers and The Competition Commission was ‘quite right’ to uphold the regulation of advertising prices until changes in marketplace are made.

“There has been a lot of talk of consolidation between sales houses in the marketplace, the only one that has gone through so far has been Sky and Viacom,” he explained.  

“With consolidation not materialising my view is that CRR is rightly in place to protect advertisers, and until consolidation does take place, we fully support the CRR proviso.”

Andy Niblett, director of trading at Feather Brooksbank also backed the decision to reject ITV’s proposals, and said that ITV continues to hold a ‘strong advantage’ over its competition based on the quality of its product.

“People forget that the second reason that it was brought in was to smooth the merger between Carlton and Granada who were quite aggressive against each other as well from the outside and what would often happen would be that the two would compete so heavily that agencies would be forced to take one or other off the schedule altogether,” Niblett explained before adding that he didn’t expect to see a review of CRR in the near future.

Meanwhile, Tom George, producer for Happy Hour Production in Bristol has said that the rise in costs could see more advertisers look to cost save and go directly to production companies or post production companies for the full TV campaign.

“With the cost of media spots potentially only rising slightly if the new channels launch, the budgetary skills of companies  can be a bit more relaxed as the threat of less air time for spend has been reduced,” said George.

He continued to say that the Competition Commission’s decision would means that any fear of a ‘slight reduction’ in budgets may be avoided, but that clients will still demand that production companies ensure that messaging is more focused and direct in order to gain quicker response rates.

 “This demand for immediate results and responses will mean that those involved within DRTV and Brand Response will have to work harder in order to produce better results, especially as we are exiting a recession,” added George.

The Competition Commission will publish its final verdict in February.