The joint committee of broadcasters and advertising agencies has advised TV channels not to accept advertisements from defaulting companies. The embargo would be effective from November 10. While the committee has named Samsung, Motorola and Reckitt Benckiser as defaulters, it has hinted at taking a tough position against some others too.
A joint statement, issued by the Indian Broadcasting Foundation (IBF) and Advertising Agencies Association of India (AAAI), has pointed out that “many advertisers are not paying their agencies on time and if this trend continues, all these advertisers would also face similar action”. BPL and Ozone are among the companies stopped by IBF from advertising in the past.
According to a Samsung Electronics representative, “the company is surprised at the press statement issued by IBF and AAAI. We are one of the largest advertisers in the country with an excellent track record of payment.” The official added: “any issue that we have with individual broadcasters have to be discussed with Samsung India’s media AOR.”
The company argued that “there is absolutely no ground or basis for coming to a conclusion on implementing an embargo on Samsung advertising”. It has been done unilaterally and without any substantive basis, according to Samsung.
When contacted, Prasar Bharati CEO K S Sarma told FE, “we’ll go by IBF advice. It has been sent to the director-general of Doordarshan for implementation”.
According to ESPN India MD RC Venkateish, the channel will work closely with IBF. But, he clarified that ESPN has had no issues with any of these advertisers. Mr Venkateish said that “it’s a periodic process for IBF and AAAI to put out a defaulters’ list.” He added that every other month, there’s a list of four to five defaulters. But, issues are usually resolved through negotiation, he said.
A statement from Samsung pointed out that the company has received “communication from some of the key channels such as NDTV, Star, ESPN and Ten Sports—wherein the Samsung India/Cheil Communications stand with respect to the matter is corroborated in total.” Cheil Communications is the media arm of Samsung.
To put things in perspective, IBF represents major TV broadcasters and AAAI significant advertising agencies. The two bodies signed an agreement in 2001 to oversee aspects related to advertising. According to the joint statement issued by IBF and AAAI, their working committee has been regularly meeting for over three years now. Through the collective effort, it has been able to reduce the advertising dues of various broadcasters, the statement said.
On the latest embargo, “the committee unanimously decided to advise all the IBF members not to accept any further advertising business from the defaulting advertisers with effect from November 10.”