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WPP's response to NDTV: Delayed but eye-opening

23-August-2012
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WPP's response to NDTV: Delayed but eye-opening

It was WPP’s turn to return the shock treatment to NDTV, when on August 22, 2012, the holding company issued a statement saying that not only had it not been served the NDTV lawsuit till then but it also believed that there was no merit in the claims made in the lawsuit that was widely commented upon in media, across various markets.

WPP’s statement pointed out that it was not in the jurisdiction of a New York State Court to hear such a complaint. The statement also said that despite the lack of valid service, WPP was still initiating action to strike out the complaint and it would even consider pursuing defamation proceedings against NDTV.

WPP was responding to the statement nearly a month after NDTV had filed the case in the New York State Court. For the Indian advertising and media industry, WPP’s reaction was another jolt, which some said was eye-opening albeit delayed.

The “hypothetical” lawsuit
For many industry leaders, the first question was why the notice was yet not served to WPP and its companies, when media reports gave the clear impression that the lawsuit was nearly in the process of being tried in court. The fact that Nielsen, Kantar, TAM Media Research and the likes were not offering any comments on the development because it was a matter of “sub-judice” further reinforced that impression.

Sam Balsara, Chairman and Managing Director, Madison World said, “This comes as a surprise. Does this mean the lawsuit has not been filed, not been admitted or the defendants have not been served? I am not sure.”

Lynn de Souza, Chairman and CEO, Lintas Media Group, on the other hand was amongst those who was not surprised that the notice has not been served to WPP or its companies yet.

A senior industry official explained, “A lawsuit is served soon after it is registered in the court, where it has been filed. I guess now we have to watch out whether it is indeed in the jurisdiction of the New York State Court to hear this complaint. But even if it is not, NDTV would still have options after that to continue its legal pursuit of the matter.”

Till such time there is clarity on this aspect, the lawsuit has been dubbed “hypothetical” by the defendants, which itself dilutes the first effect that it had created on industry stakeholders.

A delayed response
Many agency heads state that the development was “eye-opening”. A media agency CEO explained, “TAM Media Research is the currency of the television industry, which is a big portion of the advertising pie. There are clients who had already expressed concern over what they were reading in the press. TAM owed us an explanation of what was going on. So while WPP’s response really is a revelation on the subject, in a sense it is delayed.”

The question of why did WPP take a month to respond was raised by quite a few. Some said that the due diligence process of ensuring that none of the WPP companies were served in any of its markets and what WPP’s ideal next step should be, may have taken time. Others countered the thought by saying that by waiting for this long, and with TAM suggesting measures to improve data, perhaps the right message was not sent out.

“TAM announces measures periodically to strengthen its data but the announcement on the back of the NDTV lawsuit, appeared that TAM was admitting to faulty data and that it was taking those corrective measures, including hiring of a security officer, due to the allegations raised in the NDTV complaint,” added the agency head.

Arvind Sharma, President, Advertising Agencies Association of India, who is also the Chairman of Leo Burnett India commented, “The case is between the two sides. As users, we’re not involved and we do not want to be involved. But as users, in the short run within the limitations of the current research design, we want to be assured that all the required steps are being taken to address any challenges to data reliability. In the medium term we want to move to a more representative research design, sample size and research process.”

Taking a hard look at the ratings mechanism
On the whole, the NDTV lawsuit had led all stakeholders to get up and take notice of ratings mechanism in India and what are some of the ground issues that it is facing. The lawsuit also reinforced conversations around the joint industry body of BARC (Broadcast Audience Research Council). Punit Goenka, MD and CEO of Zee Entertainment Enterprises and Chairperson of BARC asserted that irrespective of the direction of NDTV’s lawsuit, BARC will continue with its process and move forward.

Lodestar UM CEO Shashi Sinha added here that due to this entire episode, BARC got going at a faster pace, as various constituents came together at this juncture. He said, “I am happy that something positive is coming out of this sad episode.”

Nonetheless, as Balsara noted, “It is good that till the new BARC ratings evolve, a group from BARC will oversee TAM. This is good for both, TAM and industry as a whole as it is confidence-building.”

Balsara is referring to the suggested steps by TAM Media Research that includes a review by the industry of research processes that determine what TAM puts out in its weekly reports. And what meter homes are left out of reporting for being data outliers. The steps also suggested for getting the outlier homes independently audited and for an internal audit team to be put in place. Outlier homes are referred to those households that show erratic viewership patterns.

But the matter of NDTV vs. TAM/Nielsen/Kantar/WPP is far from settled yet. All eyes on what comes next from NDTV now.

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