The Indian Newspaper Society (INS) has taken objection to the deals done by advertising agencies that are based on exclusivity and market share clauses. The INS believes that these are Restrictive Trade Practices and has written to the MIB to intervene and issue guidelines to advertising agencies to refrain from such deals. The INS has also written to its members advising them not to enter into such transactions.
In a letter to Prime Minister Dr Manmohan Singh, in his capacity as Minister for Information & Broadcasting, INS President Hormusji Cama has written that a “disturbing trend is emerging” that “is seen in certain advertising agencies signing exclusive and monopolistic deals with certain newspaper groups, which results in advertising agencies arm-twisting both corporate groups and newspapers into channelling ad spends”.
As is known, the Advertising Agencies Association of India (AAAI) has joint meetings with the INS to table industry issues and to ensure the working together of these two domains. Replying to whether the concern was tabled with the AAAI, Cama said, “Our concerns were shared with the AAAI and they were noncommittal. While such practices have been going on for a while, they had accelerated in the slowdown, and we really had to take some action now. We are yet to receive a reply from the MIB.”
In conversation with exchange4media, Madhukar Kamath, President, AAAI, said, “I have heard of the letter, but haven’t seen it yet. We need to meet internally and also take this up subsequently with the INS at the next INS-AAAI meeting.”
In the letter, INS has suggested that the “need of the hour is for some guidelines to be issued by the Government, especially to advertising agencies, and that the INS is prepared to participate in any discussion or committee that the MIB might wish to set up to curb this unethical practice”.
Speaking to exchange4media, Cama said, “I hope the PM addresses our concerns and doesn’t succumb to pressures from certain newspaper groups that are obviously aligned to the ruling party.”
The genesis of this action has been the various complaints made to the INS by newspapers. It is understood that a leading newspaper has been approaching clients, promising a certain percentage of discount if the client spends 90 per cent of the print budget with that paper, and the remainder with any non-competitive publication. That, according to the INS, was where the restrictive practices began.