The Information and Broadcasting (I&B) Ministry's recent diktat of asking public sector undertakings to release their advertisements through Directorate of Audio Visual Publicity (DAVP) has not gone down well with the companies.
The companies as well as advertising agencies feel that this directive can neither be implemented nor is it in their interest.
The public sector oil companies, that together spent close to Rs 100 crore this year, feel that in the wake of competition in this sector, brand building has become important. Hence there is need to maintain confidentiality in media planning.
"Any such move to release ads through DAVP would give the competitors a chance to peek into the other's strategy," said a senior official in Indian Oil.
Currently, the oil marketing companies (OMCs) - HPCL, BPCL, Indian Oil and IBP - have a clear understanding that their accounts would be handled by separate agencies.
Besides, these companies feel that television and print media houses do not extend DAVP rates to them as the OMCs are treated as commercial organisations.
Another handicap could be that the DAVP has a centralised operation in Delhi, whereas public sector companies have decentralised their publicity initiatives. "Ads are released in different centres across the country depending on the target group," said senior company official.
Besides PSUs, even Prasar Bharati is feeling the pinch as the public broadcaster too will now have to route its own ads through DAVP.
Media planning outfits too are upset about this proposal since they could lose out on substantial business. They feel that there is no clarity on the role of the agency-on-record (AOR). "It is not clear whether companies will ask us to prepare the media plans and then route the ads through DAVP or hand over the planning to DAVP itself," said a Mumbai-based media planner.
Also, there is the question of sharing the commission offered by print and television companies. "Currently, the 15 per cent commission is shared between the creative agency (12.5 per cent) and the media releasing agency (2.5 per cent). It is unclear at this stage if DAVP would follow the same standard industry practice," they said.
Public sector companies further maintained that with the growing competition, media planning agencies have been able to negotiate ad rates, almost at par with what DAVP gets. In the case of print, they are able to save 15-25 per cent and 60-80 per cent on television channels.
"It is however not clear if DAVP would be able to bargain for such premium positions," a company official added.