Omnicom and Channel 5: are the UK’s big media agencies working for themselves or their clients?

The short answer to the above should probably be: working for both. But Omnicom’s decision to pull all its advertising from UK terrestrial broadcaster Channel 5 raises a number of rather concerning issues.

C5 gets about ten per cent of the UK TV audience so it’s a nice-to-have rather than essential on most advertisers’ TV schedules. Its prices used to be low but they’ve gone up as the station has improved its audience share (my friend Mark Sweney in the Guardian says it took £330m last year, just under nine per cent of TV revenue). so, on the face of it, it’s hardly overpriced.

But Omnicom’s group media trading operation Opera, which accounts for about 14 per cent of the UK market (WPP’s GroupM has about 35 per cent) has decided it can do without it (or its clients can do without it – more of which later), which will cost C5 about £30m. This must be rather a nasty surprise for C5’s new owner Viacom.

Unlike GroupM’s similar spat with Channel 4, which was resolved in January 2013 following the intervention of WPP boss Sir Martin Sorrell, Omnicom/Opera’s boycott looks like it will stick. Which has led some pundits to say that the real reason for Opera’s sticky approach is that it’s actually trying to ‘manage’ its relationship with C5’s much bigger competitor ITV. In other words, bung more money into ITV to get a better deal there.

But if ITV takes a lot more money, the price of ITV airtime goes up. So who actually benefits from a switch to ITV, Opera or its clients? And, if Opera benefits, what form does the benefit take?

We don’t know because Opera isn’t saying. For the health of the UK media market it’s about time it did come clean about its reasons for ditching C5.