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Newspapers to up ad rates; move counter-productive - experts

Newspapers to up ad rates; move counter-productive - experts

Author | Nitin Pandey | Tuesday, Apr 12,2011 12:07 PM

Newspapers to up ad rates; move counter-productive - experts

With the start of the new financial year, newspaper players are gearing up to announce hikes in their ad-rates. While, non-listed companies have silently drafted fresh proposals for their clients, some public announcements on the BSE and NSE from listed newspaper groups are expected soon. Amid these hikes, media experts are commiserating with advertisers who, it seems, don’t have much in their hands as of now.

Publishers noted that ad-rates of leading newspapers in the country had crossed the pre-recession rate figures and were expected to keep rising, depending on various market phenomena.

Sanjeev Kotnala, VP, Dainik Bhaskar Group, remarked, “Recession is an old word. Economy and advertising have moved away from it.”

Meanwhile, media experts felt that hike in ad rates could dissuade advertisers from putting in more money into print. Janardhan Pandey, Associate Vice President, Mudra Max, stressed that time had come for print media to start thinking of ways and means to balance their budgets from subscribers too, instead of putting the entire burden on advertisers alone. “Hike in ad-rates happens year on year even without any substantial increase in readership figures in the relevant TG,” noted Pandey.

Disagreeing with this view, Rajiv Beotra, Head, Circulation Sales, Hindustan Times, maintained, “Ad-rates have been a function of the launch of new editions, and increase in circulation and investment, and the same will continue.”

Uma Shankar, GM - Marketing, Prabhat Khabar, added here that while they had grown in terms of circulation base, they had maintained the industry trend of 15-16 per cent hike in ad rates to ease the burden on advertisers. “We also consider CPT analysis with our competitors,” he said.

Despite the hue and cry over the increasing ad-rates, print continues to see advertiser interest in terms of ad innovations and even 3D ads. What is it that has kept advertisers glued to the print medium?

Is the hike acceptable?

Being a medium where ads are not a disruption to the reader, innovation has been sought after by many a client, leading to higher recall. Media experts believed that besides being an irrefutable local city medium, print continues to be used for the brand led communication, especially in the metros. Thus, increasing spends by FMCG and auto clients have continuously been seen, besides continuous use by retail clients too. Apart from it, print is the only medium which can provide the sub city splits and niche environments that enable a local advertiser to leverage the medium.

Gautam Dalal, VP, Marketing, DNA, remarked, “Print as a medium has remained flexible to the needs of advertisers while retaining it’s credibility as a authentic news source, however, given that editorial remains fiercely independent. In DNA, editorial strength has contributed to its growing rates.”

Not convinced yet, Surbhi C Murthy, GM, Branch Head, Delhi, Allied Media, believed that coercive ad-rate hike by the newspapers will let the morale of advertisers down. “Hence, it may impact newspapers as there can be a decrease in the ad-volumes from the advertisers,” said she.

However, it is almost clear that as April comes print media companies will hike ad rates, as per experts, by 15 to 30 percent on an average. As advertisers have very less in their hands, publications having market monopoly may get away with high rates for some more time. But Pandey of Mudra Max believed, “This kind of regular steep hike in ad rate is becoming counter productive for the print industry as a whole.”

Moving ahead, ad rates of the newspapers will also rely on the newsprint inflation and price war policies. Yet, given the economic forecasts by most industries, an increase in the short to medium term is seemed irresistible. However, advertisers will still seek a logical level of ad-rates from newspaper players.


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