IBF & INS take up ‘pitch discount rates’ with media agencies

IBF has sent an email to all agency heads asking them to abstain from the practice of offering discounts to clients on behalf of broadcasters without prior approval from them. The email was sent early this week by Punit Goenka, Director, IBF.

by Naziya Alvi Rahman
Published - Aug 10, 2018 9:00 AM Updated: Aug 10, 2018 9:00 AM

In a crucial development, the Indian Broadcasting Foundation (IBF) has sent an email to all agency heads asking them to abstain from the practice of offering discounts to clients on behalf of broadcasters without prior approval from them. The email was sent early this week by Punit Goenka, Director, IBF.

exchange4media confirmed the development with three agency heads. We also reached out to Goenka’s office for comments and will update the copy as and when we receive it.

Interestingly, in another recent development, similar concern was raised by the Indian Newspaper Society (INS) in a meeting with Advertising Agencies Association of India (AAAI). Hormusji N Cama, Chairman of INS confirmed to exchange4media that he has raised the issue with AAAI and would soon be taking it up with each agency individually.

“We jointly took the decision that the agencies would not do that (offer discount). And in case they do, INS henceforth will take action,” he told exchange4media. When asked if the action could include something as serious as cancellation of the agency’s accreditation, Cama said in extreme cases, the association may even consider that.

The issue of shrinking margins for broadcasters and agencies has been discussed in all meetings held by IBF in the last one year. The matter, however, is expected to gain momentum now with both broadcasters and publishers uniting against the practice.

Talking about the development, Ashish Sehgal, COO, Zee Unimedia Limited, said, “It puts both the agency and the broadcasters on the back foot. Margins are shrinking day by day. We both have to work together and find a solution to the problem that has increased by manifold in the last few years.”

Agency heads, however, say that pricing in a free market is run by demand and supply and not what one wants.
“It’s a free market. I have to protect my business and hold my clients back and win new clients. I have every right to get them the lowest price. If not me, someone else will. Having said that, there is no compulsion on a broadcaster to take the slots if they feel we are underselling them,” says an agency head.

Meanwhile, owner of a leading publishing house claimed that in several cases he asked the agenciess to bear the loss on committing a lesser rate on their behalf. “Why should I suffer the loss for something I have not committed,” said the publisher.

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