Media agencies play waiting game on 10+2 ad cap

Media agencies will wait for the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) order on Telecom Regulatory Authority of India’s (TRAI) ad cap regulation before negotiating with broadcasters on rates.

According to IPG Mediabrands & Lodestar CEO Shashi Sinha, the picture will become clear once the TDSAT verdict is out. “It will be difficult for channels that are following the 10+2 ad cap regulation to get in a rate increase at the moment. When the verdict comes, we will decide how much of the burden we will have to share with broadcasters due to inflation,” Sinha asserts. India’s three leading broadcast networks—Star India, Zee Entertainment Enterprises Ltd (ZEEL) and Viacom18—have started following the ad cap that came into force beginning 1 October. Others such as Multi Screen Media are awaiting the TDSAT order. The tribunal will hear petitions filed by News Broadcasters Association (NBA), Sun TV Network, 9X Media, and Eenadu Television, among others, challenging the ad regulation on 31 October. Broadcasters who are left with lesser inventory to sell are asking for ad rate hikes, but resistance is coming from advertisers. ZenithOptimedia CEO Navin Khemka says that clients have directed the agency not to sign new deals with substantial hike since the ratings do not justify them under the current circumstances. “The existing deals will last for some time. We are not signing new deals till clarity comes in. Our clients have mandated us not to sign new deals with a substantial hike. There is no increase in ratings in the past couple of months to suggest that a rate hike is justified,” expounds Khemka. Khemka believes that clients will not agree to an ad rate hike just because there is shortage of inventory. Contrary to broadcasters’ demand of doing CPT (Cost Per Thousand) deals, Khemka says deals have to be done on CPRP (Cost Per Rating Programme) basis. “Anyway, a lot of deals for the festive season have already been done. Deals have to be done on the basis of CPRP. The logic of paying more because there is lesser inventory on a channel does not hold. New channels like &Pictures have launched so that inventory is created. So clients have options,” he elucidates. In a similar vein, GroupM investment servicing director Sidharth Parashar says that the agency is waiting for the TDSAT verdict. “Some channels have gone down to 10+2, but we are not giving a hike to anybody.” Vivaki Exchange CEO Mona Jain believes that a middle path will arrive. “I agree that if the ad cap comes in, then the inflationary burden will have to be shared. But this needs to be done on a case-by-case basis. It cannot be a diktat. Broadcasters and agencies will have to sit together and work things out.” According to Jain, the current market situation does not command inflation. “Generally, if the economy is booming, then clients advertise and inflation on ad rates sets in. Here inflation will happen in an unnatural manner if the viewership does not go up in proportion to the rate hike and the inventory going down. The ad inventory going down is beneficial only if viewership goes up. Whether the broadcasters will command a rate hike or not will depend on their network strength.” Broadcasters are split on the ad cap issue. It may be noted that MSM under IBF president Man Jit Singh is playing the waiting game. Reliance Broadcast Network Ltd (RBNL) joined music and news channels in moving TDSAT and opposing the ad cap regulation. The petition by music channels and RBNL will be heard on 21 October. The news broadcasters have been told to faithfully maintain record of the time of advertisement per hour for examination by the tribunal at the time of hearing of the appeal on 31 October. Tags: Ad cap, GroupM, IPG Mediabrands, Mona Jain, MSM, Navin Khemka, Shashi Sinha, Sidharth Parashar, Star India, TDSAT, Trai, Vivaki Exchange, Zeel, ZenithOptimedia

Source: http://cablequest.org/news/national-news/item/3340-media-agencies-play-waiting-game-on-10-2-ad-cap.htmlSource: http://cablequest.org/news/national-news/item/3340-media-agencies-play-waiting-game-on-10-2-ad-cap.html