Angry with ad-rate hike, advertisers threaten TV boycott
12 October 2007
IBF is an industry body representing almost all broadcast networks within the country, including the biggest broadcasters Zee, Star, Sony, Network18 and NDTV.
According to industry sources, the leaders in ad-spending, which include Hindustan Unilever (HUL), Procter & Gamble (P&G), Reliance ADAG, Bharti Airtel, Maruti Suzuki, Coca-Cola, PepsiCo, and General Motors are reportedly mulling a retaliatory halt to their commercials, though no confirmations are forthcoming.
Industry sources also indicate that media planners and buying agencies are engaged in mediation between the warring advertisers and broadcasters. Media buying agencies also indicate the large presence of rumours in this regard, though both media agencies and advertisers have received correspondence from TV channels that want to implement the surcharge starting 16 October.
IBF sources indicate that the rise in prices is forced by substantially higher input costs, which include the cost of programming and transportation, artiste fees, costs pertaining to procuring news, movies, and so on.
According to sources in the broadcasting business, while the number of Cable and Satellite (C&S) homes has gone up from 42 million to about 62 million, extreme competition and clutter in broadcasting space over the last three years has seen ad rates on TV channels plummet by 20-30 per cent, directly impacting channels'' bottom lines.
Sources point out that the 25 per cent surcharge is on MRP, and not on the actual rate card. That would mean that, if somebody has been paying, for example, Rs100 for a 10 second spot, the surcharge would be applicable on that rate, and not the pricing given in rate card. The actual rate card is at least 40 per cent higher than MRP.