What was intended to be a perfect solution could well turn out to be a problem business model, judging by the words of some noteworthy media experts. Perfect Monitoring Services is in the process of keeping a tab on cable transmission and the ads released on them from more than 225 control rooms and 70 locations all over India. Ad breaks on local cable channels, the duration of the breaks, the commercials released on them, and the duration of each commercial - all possible data would be available to media agencies via the internet, as long as they part with the required subscription fee. Advertising on local cable channels, which has hitherto been left out of the TAM monitoring system would now encompass a certain degree of transparency and accountability. The question that remains is - will media agencies buy into such a service?
Nandini Dias, National Media Director, Lodestar asserts that the revenue that goes towards local cable channels is in any case abysmal, which means that the service would hold limited value for media agencies. She says, “While TAM keeps a tab on all the advertising that goes on in mainline channels, there is a need to monitor the same on local cable channels as well. This is why Perfect Monitoring has stepped up for the cause. Unfortunately, the business model doesn’t make much sense. The ad rates on local cable channels are so low. For instance, a client pays barely Rs. 70 for a 10-second spot on a local channel. And for such a buy, the commission that would be derived by media agencies would be just peanuts. With the low commission in mind, if media agencies have to part with added bucks as subscription fees to the kind of service that Perfect Monitoring aims to provide, it’s not really an economically viable proposition.”
She adds, “It must also be remembered that most media agencies monitor activities on various channels on their own initiative. Would it make sense for media agencies to shell out a fixed sum on a buy that’s priced so low? Local cable channels derive zilch of the total ad pie, barely 1 per cent of the total revenue.”
Sandeep Tarkas, President, MPG Group states, “It certainly isn’t an innovation of any kind on the part of Perfect Monitoring Services. If my memory serves me right, TAM monitoring had taken up a similar initiative around 4 years ago. But the fact remains that local cable channels derive negligible sums as ad revenue, the commission derived from a buy on a local cable channel is minimal, and in addition if media agencies are asked to furnish a sum as subscription fees, it could be asking for too much. Having said this, the other side of the argument is that it’s the client who would take the final call on it. If the client decides that the service is absolutely necessary, it’s more than obvious that media agencies would buy into it.”
Hiren Pandit (GM, Mindshare) believes that if the client is offered the option of winning over an added 20 per cent of audiences because of local cable channels, most brands are likely to opt for the service. He elaborates, “In markets such as Gujarat, nearly 30 per cent of the viewers tune into local cable channels on a regular basis. In a city like Mumbai, it could be as high as 20 per cent. What Perfect Monitoring should ideally do, is to approach the clients and highlight the merits of its service. Shelling out a small sum for a 20 per cent increase in audiences shouldn’t really be a debatable point! But what’s still unclear to me is, how is Perfect Monitoring going to go about the entire task? Because, we aren’t just talking just about the big guys like InCablenet and Siticable, we are also talking about a number of smaller cable operators that mushroom under them. It could be a Herculean task!”
Pandit adds, “Pricing plays an extremely important role in such a service. The pricing ought to be strategic and a win-win situation for all concerned. If the media agency is expected to part with Rs. 25 as subscription fees, out of the Rs. 50 that it earns, the natural instinct on the part of most media agencies would be to turn down the offer. What Perfect needs to do, is to partner with cable operators in order to bring on fair pricing. The merits of such a service are many. It would bring in accountability and lot more small players on television, in addition with national players that are interested in targeting local audiences the scientific way.”
A lopsided business proposition? Or one that would add plenty of value to the gamut of media buying and selling? We would refrain from sitting in judgement, but the argument from our side would be that the monitoring of advertising in local cable channels is an absolute must in order to ensure sustained advertiser interest, greater revenues and transparency within these channels. In that sense, Perfect Monitoring Services is completely justified in its cause.