Quite what the media giant achieved with this bout of sabre-rattling is unclear but Channel 4 certainly couldn’t afford to reduce its ad rates much (it had already offered to renew the two-year deal that expired at the end of 2012). Media sources claimed that the dispute wasn’t really about price anyway, more GroupM’s desire to get premium spots for economy prices.
The dispute, such as it was, promised to backfire on GroupM. Big media buyers throwing their weight around (GroupM agencies account for about a quarter of the revenue on C4, £250m or so) is not good news for them; it’s just the sort of stance that’s likely to draw the attention of regulators from the UK’s Ofcom to the EU’s various anti-trust bodies.
And pulling advertising is hardly likely to endear the company to its clients, who hire GroupM agencies to get them on air. One possibility is that it had over-promised new clients on price – and couldn’t deliver.
At the start of the year bigger commercial rival ITV’s shares rose sharply, partly because some dozy City analysts though all that money would flow straight through to Adam Crozier and pals. The airtime market doesn’t work that way boys.