Don't hit the panic button, get a new vision

Viewers and advertisers are switching off ITV, but all it takes is successful, popular programmes, and revenues will flicker back to life

Reports of the financial woes of ITV have contained more than a whiff of schadenfreude. The rest of the media can find little sympathy for the titans of Granada, Carlton et al. who are deemed to have gorged themselves for so long at advertisers' expense. And it's simple enough to throw other accusations at the Big Two and Network Centre: that they've failed continually to understand the new media landscape; that they've squandered millions on the less than convincing ONdigital (or ITV digital as it is now being renamed); that they can't manage their own brand; and that they just can't get Saturday night right.

But considering the future of ITV is in many ways little different from considering the future of the BBC, its only real rival. In macro terms, it is in the interest of no one for the big terrestrial stations to be weak or second-rate.

The heritage of all terrestrial television resides in the production of original, quality programming that commands sizeable audiences. It's as simple, or as difficult, as that. The advent of new rivals via cable or satellite shouldn't have made any difference given their menu of largely indifferent bought-in programming, films and sport, watched by comparatively tiny audiences. But ITV let itself be spooked and continues to do so. It's as if it can't get its head round the inevit-ability of falling share. Given the reduced time that viewers spend in front of their TVs – with all kinds of alternative leisure pursuits vying for their attention – that fall will continue. But it does not herald the demise of ITV as a unique commercial and cultural force.

As a counter-balance to current criticism, it's worth restating the positive brand values of ITV – the ones on which it can build. For all the decline in viewing share, it remains the only real way to hit a high percentage of the population at one go with commercial messages. To marketing directors in mass-market sectors – and there are plenty of those left – this is a valuable opportunity. Put crudely, ITV is still the only medium for the "big shout" creatively. But it is no longer suitable for those brands which can afford only to whisper, and ITV's sales people should stop trying to entice those brands on to their schedules. It's cynical and damaging to their own brand.

Investment in programming is running at £750m a year, a massive commitment. The variable success and quality of the output in recent years stems from ITV's apparent uncertainty about whom it is targeting. Success in drama has brought accolades but not much movement in viewing figures. Success in game shows brings the accusations of dumbing down that can scare off advertisers. ITV needs to come down on one side or another. And its best bet is to stick, or rather recommit, to its traditional strengths and truly own that territory. What's needed is a strong core programming strategy, especially as there are signs from Sky and Channel 5 that they can come up with successful populist programmes. The ITV schedule needs a rapid injection of new life; apart from Who Wants to be a Millionaire? it all looks a bit long in the tooth.

It is widely felt that ITV has become more responsive to advertisers' needs. It does now act as if its £2bn revenue has to be earned rather than just collected, and the buying process is much simplified. Humility can only help, especially as there is a new breed of marketing clients who were not weaned on the absolute necessity of a TV presence for their brands These clients need continual persuasion that ITV can deliver a mass audience efficiently and cost-effectively.

From a marketing perspective, there will always be a need to put big brands in front of big audiences. If fame is the name of the game, ITV is still uniquely placed to deliver it, provided it can find and keep its nerve. Our agency recently launched an initiative, More Than, for the insurer Royal & Sun Alliance (hopefully, you will recall Lucky the dog). This was an ambitious attempt to breathe fresh life into what is in many ways a moribund sector. The media plan was wide ranging but at its heart was prime-time ITV scheduling. It had to be: we needed to make a big statement about a big project. That's what ITV is, and hopefully will continue to be about.

Crisis of confidence

"It couldn't happen to a nicer bunch of guys," was the comment of one leading advertising executive on the woes of ITV and its two main companies, Carlton and Granada. By anyone's standards, the network has had a dreadful three months.

*25 April: Stuart Prebble, chief executive of ONdigital, is promoted to be head of ITV. He admits that the £700m already spent on ONdigital by Carlton and Granada may not be enough to bring it into profit. The service is to be rebranded as ITV Digital.

* 13 June: Granada says it is cutting costs after a 10.8 per cent fall in advertising revenues in the previous nine months. Chairman Charles Allen says there is "no visibility" beyond the next month, and previous hopes of a marked upturn in the fourth quarter now seem wildly optimistic.

* 24 June: A letter from Mr Allen to Tony Blair is leaked, calling for help to protect ITV from foreign predators, and saying ONdigital might have to close.

* 25 June: Carlton reacts furiously to Mr Allen's letter. Chief executive Gerry Murphy calls it "hysterical scaremongering".

* 26 June: Zenith, the media-buying agency, says the amount spent on advertising in the UK will fall for the first time in 10 years and that ITV is facing the biggest slump in its 45-year history.

* 11 July: BSkyB's chief executive, Tony Ball, sends bananas to Mr Allen, Mr Prebble and Michael Green, Carlton's chairman, mocking the rebranding of ONdigital.

* 17 July: Merrill Lynch, the broker, slashes its forecasts for ITV revenue for this year after a 25 per cent fall in ad sales in July.

Paul Simons is chairman and chief executive of Ogilvy & Mather, the advertising agency

Research by Nicola Leaf