INS defends 15% ad surcharge, calls it a ‘temporary measure’ amid rising costs

The Indian Newspaper Society (INS) has defended its recommendation asking member publications to levy a 15% advertising surcharge, arguing that newspapers should not be expected to absorb rising input costs when virtually every other industry has already passed inflationary pressures on to customers.

In an exclusive interaction with exchange4media, INS President Vivek Gupta, who is also Chairman and Managing Director of Sanmarg Group, described the surcharge as a temporary response to extraordinary cost pressures rather than a permanent increase in advertising rates.

"Costs are rising. Every one of our clients, be it a car manufacturer, a biscuit manufacturer or a clothes manufacturer, everybody is in the process of passing on the cost to consumers. And this has reflected in their quarter-one earnings and annual earnings. So why are we singled out? Why are we told, 'Don't increase your prices. Continue living as it is...' We don't understand these double standards. We want a level playing field. And we seek the support of the agencies and all our clients in implementing this?" Gupta said.

He compared the proposal to a temporary fuel surcharge, saying it could be withdrawn once input costs stabilise. "If the war and other situations, which have forced us into this position normalise, and prices come down, we can always remove the surcharge. It's not a permanent surcharge."

Gupta also emphasised that INS was not prescribing prices but issuing guidance to publishers. "In any case, publications, depending on volumes and several dynamic factors, discuss and negotiate rates with clients. INS is only trying to play the role of a facilitator and a guide rather than anything else."

Publishers Should Not Bear the Burden Alone

Gupta said publishers are not asking advertisers alone to shoulder rising costs.

According to him, newspaper groups have simultaneously increased cover prices in several markets, with readers continuing to support the medium. "We are also increasing cover prices. It is not that we are asking only advertisers to share the burden. Readers have accepted the increase and continue to engage with newspapers. In most markets, circulation has continued to grow."

He argued that newspapers have survived repeated industry disruptions over the past two centuries because they continue to deliver value to both readers and advertisers. "In this disruptive world, we are perhaps the only legacy medium that has survived every wave of disruption and continues to deliver results to advertisers."

Drawing a parallel with other industries, Gupta urged advertisers to view newspapers no differently from any other product facing inflationary pressures.

"Please treat us at par with every other product whose prices have increased because of higher costs. Newspapers cannot remain insulated from inflation."

“Not a Pricing Directive”

Responding to concerns raised by legal experts that industry-wide pricing recommendations could invite scrutiny under competition law, Gupta said the INS advisory should not be viewed as a pricing directive.

"INS has around 900 member publications, while there are nearly one lakh publications in the country. The numbers speak for themselves."

He added that the organisation respects the law and views the recommendation as guidance rather than a mandate. "It is, at best, a recommendation to help publishers deal with rising costs, similar to how industry bodies guide their members. We are simply passing on part of the increase in input costs. We are not prescribing any special pricing."

‘Consensus Comes First For Measurement’

The surcharge debate has coincided with renewed industry discussion around the prolonged absence of the Indian Readership Survey (IRS), with several advertisers arguing that stronger audience measurement would improve confidence in higher print investments.

Gupta said INS remains committed to supporting a new readership measurement exercise but stressed that rebuilding a common industry currency requires broad consensus across publishers, advertisers and agencies.

"INS is fully committed to supporting any readership survey, provided it benefits the industry and its members. We have always participated in every discussion. But the IRS is not the responsibility of one organisation alone. The entire industry has to agree before any survey can move forward."

He added that rising costs and unresolved operational issues have also delayed progress. "There are practical issues for which agencies have not yet provided concrete answers. We are waiting for the next round of discussions."

ABC Continues to Provide Credible Metrics

While acknowledging the absence of the IRS, Gupta said the print industry continues to rely on the Audit Bureau of Circulations (ABC), which independently audits newspaper circulation.

"As an industry, we are one of the oldest to have measurement metrics. The Audit Bureau of Circulations (ABC) is a very robust body and constantly measures our performance and circulation. However, publishers' economics have been pushed to the wall. Believe me, we play a very important role not only in the economy but also in nation-building and democracy. But sometimes I don't think we are valued enough. Pricing and predatory practices have led to intense competition and to the situation we are in today.”

Gupta says the industry needs a credible measurement framework—whether it is the IRS or another national readership survey. “At least we should have some reliable data and information. The biggest validation comes from our clients because, after advertising with us, they receive calls, enquiries and responses. That's why they continue to come back to us.”

Unfortunately, for some other media, such measurement metrics are not available, he claimed.