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Festival bonanza for digital & OOH as advertisers shy away from troubled TV medium

Festival bonanza for digital & OOH as advertisers shy away from troubled TV medium

Author | Priyanka Mehra | Wednesday, Oct 16,2013 9:22 AM

Festival bonanza for digital & OOH as advertisers shy away from troubled TV medium

2013 has been anything but dull for the broadcast industry; but who said excitement is always a positive thing? The currently on-going industry divide on the ad cap issue, digitisation, recently resolved TAM ratings imbroglio, gross vs. net billings issue, dispute over LC1 markets and people-meter expansion are just some of the issues that are surrounding TV – a medium that was once considered the safest and a sure shot way to reach target audiences for brands across the spectrum.

“The broadcast industry is behaving in a very confused and opportunist manner. On one hand, stakeholders are saying the right things, but on the other, they are all confused with launching more channels and wanting more inventories for those channels. Sometimes they are opposing the regulation, but when there is an opportunity of lack of clarity in a regulation, they want to use it for self interest. Somewhere I feel this whole random expansion to 600 channels in the country has come down to a stage where there is lack of business clarity as a whole. You have lots of performing networks, performing assets and investment assets; between managing these three, you are sending a lot of confused signals to the market and the advertisers who are actually putting money in these assets,” observed Ajit Varghese, Maxus MD, South Asia.

For any kind of investment, an environment of certainty is integral. For advertisers planning a campaign, there needs to be a predictability and uniformity that the broadcast industry is lacking at the moment with a new development being thrown at advertisers at every corner and turning. The latest one being the clear divide between the broadcasters following the 10+2 ad cap diktat (Star Plus, Zee TV and Colors following the ad cap, whilst select news and music channels have managed to get a stay against the TRAI order in August by filing a petition in TDSAT till the next hearing), which has also led to several channel hiking ad rates.

However, the current scenario has resulted in a wait and watch game wherein advertisers and media agencies are awaiting TDSAT’s order on TRAI 10+2 ad cap regulation for any further conversation with individual broadcasters on ad rates.
Industry stakeholders maintain the view that from a business angle, this is an entirely wrong time for ad rate hikes, as clients are in no mood to pay, given the current economic scenario.
Festive spending curbed on television
“Festive time sees lot of advertising, hence clutter as well. Unless you do not stand out in it, it is better to avoid it; especially, if you are in a category that does not have high dependence on festive season. Since it involves huge spends to be noticed in this festive clutter, any advertiser will think twice before investing in television,” said Mayank Shah, Group Product Manager, Parle Products.

Varghese echoed this sentiment, “Confidence has been a bit shaken; it is the question of the advertiser’s hard earned money at the time of recession/slowdown. Ultimately, advertising is an expense, and when there is confusion, you invest less. This has an adverse effect on brand building in terms of long-term engagement.”

Is TV’s loss other media’s gain?
“Confusion in the broadcast space has possibly caused a 10-15 per cent reduction in brand spend. The short-term gainer is possibly outdoor and not so much print as it should be,” said Harish Bijoor, CEO, Harish Bijoor Consults.

On the back of the sluggish economy, GroupM revised its ad spend estimates last month, which it had projected earlier this year. The original TV spends moved from 11 per cent to 10.1 per cent.
Ad spends for H2 have come down to 4.7 per cent from the earlier estimate of 7.3 per cent. Not only this, the report also states that in pre-Onam period, FCT on Kerala channels fell by 13 per cent. This may be indicative of the advertisers’ mood during the festive season.

Interestingly, digital (30 per cent) and outdoor (6.1 per cent) spends remained unchanged – emerging as a ray of hope amidst the slowdown-hit declining spends.
“Because of steep fall in Rupee, the total ad budget parked for print, radio and television is being cut by almost 30 to 35 per cent.  The industries hit badly are consumer durables and automobiles,” commented Sandipan Ghosh, Assistant Vice President – Marketing, Ruchi Soya Industries.

Given the scenario that advertisers are definitely tightening their purse strings, the fall in Rupee is not helping either. RoI is now not only just a buzz word, but has transformed the marketing officer to a quasi financial officer, who is out to get the best bang for every buck. Other media seems to be clearly benefitting at the cost of television advertising.
“Other media are definitely benefitting – not only digital, but also print and outdoor. This is happening more than the natural media trend because of the confusion that TV has created.  TV has always been considered a safe investment. We always knew it works. Even with the advent of multiple screens, the default screen is still TV. A lack of organised behaviour and structure has unnecessarily led to raising of questions on an established medium. If people are spending 45 – 50 per cent of money on TV as an industry, even if it falls by five per cent, it is a big shift,” added Varghese.

Way forward
Even with all the confusion surrounding TV, stakeholders remain optimistic and hope the concerned parties and industry bodies will come together to resolve the issues shrouding this medium. 

“I think what is missing, if I may say so, is transparency – there has to be greater transparency on the part of government and broadcasters, and between broadcasters, agencies and advertisers,” stated Sam Balsara, Chairman and Managing Director, Madison World.

Nonetheless, other media continue to make the most of television’s woes this festive season.

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