Advertisers watch and wait as RTE decides to change its way of doing business

RT╔'s decision to change the way it sells airtime will have major repercussions for the way the station does business with advertisers.

The station is switching from the pre-empt selling system which it has used since the 1980s to a managed deal-based system.

The move is not unexpected as other commercial stations including SKY, Channel 4 and the ITV network operate a deal-based system. RT╔ has not yet indicated the type of managed system it intends implementing or even a fixed date for the changeover.

The station is embarking on presentations to key advertisers to explain the new system and informally has targeted January 1st for the switch.

Media planning is one of the most complex parts of the advertising mix as advertisers attempt to cost-effectively secure the right audience in terms of volume and profile for their campaigns.

The pre-empt system is essentially a spot-selling system whereby RT╔ sells individual spots - say a 30-second advertisement slot - for a price that is often decided on the day.

An advertiser may have booked a spot only to see a rival come in at the last minute and secure the same spot by paying more for it.

This clearly involves a lot of manpower for both agencies and the station. RT╔ has a sales and marketing department of 50 and agencies need experienced television buyers to plan campaigns and negotiate time slots on a daily basis.

The new method of selling space, which the station has bought from Carlton in Britain, is a software-based system that operates by selling a specific audience to advertisers.

An advertiser will come to RT╔, usually a month in advance, and request a specific audience at a particular price. The Carlton system will then suggest a media plan of slots that delivers that audience. What is not clear at present is whether RT╔ will sell that plan on a fixed price basis depending on the cost per thousand of the audience that it will deliver or if the station will establish a station price and sell deals based on discounting that price.

"The managed system will make us more accountable and will give clients more certainty," says Ms Geraldine O'Leary, director of sales and marketing at RT╔.

She has acknowledged that there are still elements of the new deal system that have to be worked out. "The big thing from our perspective is that it ties money in and protects our revenue."

Under the new system, clients will have to reveal their budgets upfront as they secure deals. At present, budgets are often drip-fed to the station.

"A number of things are unclear at the moment, including how they will manage the delivery of the audience," says Mr Richard Law of MediaVest, who buys television space for clients including Procter & Gamble and the VHI. "However, we welcome the introduction of the new system." Mr Michael Caraher, chief executive of the Association of Advertisers of Ireland, is equally positive about the changeover. "It's an easier system from everyone's point of view and it's less labour intensive."

The new deal system is a big challenge for RT╔, not least because of the tight time-frame between its announcement and its introduction.

According to Ms O'Leary, the station has embarked on an internal training programme following a Carlton model. The new system also demands a closer relationship between programmers, schedulers and the station's commercial division as the delivery of the deals will depend on the station's ability to deliver audience.

It also favours big budget clients or multinational media planners with a large client list as they will be able to strike deals with the station.

bharrison@irish-times.ie