Richard Desmond's company says it intends to take leaf out of innovation-led business model of Apple to win over advertisers
Richard Desmond's Northern & Shell has said that it intends to take a leaf out of the innovation-led business model of Apple and look to offer collaborations with advertisers across its TV, magazine and newspaper properties.
The company ? which owns media assets including Channel 5, OK! magazine, the Daily Express, the Daily Star as well as adult channels such as Red Hot and Fantasy ? said on Tuesday it needed to be "a bit more like Apple" if it wants to win over advertisers with a new brand of media deals.
Nick Bampton, the head of sales for Channel 5, also said that TV ad revenues at the broadcaster are up 19% year on year and that he expects full-year sales to come in even higher than this.
While Channel 5's figures benefited from the resolution of a trading issue with Aegis Media ? the media buying agency pulled its advertiser spend from the network last year ? Bampton said that the broadcaster was performing exceptionally strongly regardless. "We will see the real benefits [of our strategy] in the second half of the year," he added.
Bampton made the comments at an event unveiling an initiative called N&S Partnerships to about 100 senior media buying agency executives.
He outlined an ambitious partnership model for advertisers beyond buying traditional "spots and spaces" of TV airtime, offering "things money can't buy, until now" including tie-ups that will include access to talent, licensing, events and full editorial involvement.
Bampton added that there was a possibility Northern & Shell could buy a significant amount of an advertiser's product as part of an overall deal, such as for giveaways or sampling across titles or in a competition. These arrangements between advertisers and media owners are generally known in the industry as contra deals.
"For us to just concentrate on the price of advertising ... we would be missing a trick if we didn't utilise our assets better," he said. "The manufacturing [traditional trading] part of our business is already extremely efficient. We don't want to be just a siloed commodity-based advertising operation."
He compared the ambition of Northern & Shell's new partnership programmes with the model adopted by Apple ? a company he said made real value out of design and innovation.
"We need to be a bit more like Apple. Apple leaves the low margin of manufacturing to others," Bampton said. "Manufacturing is crucial but what really adds value is design and innovation. We want value-rich, high-margin collaborations."
Bampton added that while it was still crucial to get right the selling of "spots and spaces", what he referred to as the "tangibles" of the current TV airtime trading system, he said what N&S is aiming to offer is "intangibles" and challenged media buying agencies to work with the company to explore opportunities for their advertisers.
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Source: http://www.guardian.co.uk/media/2011/jul/05/northern-and-shell-plans-advertising-deals
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