Print publishers hesitant to implement INS-recommended 15% ad surcharge

India’s newspaper industry may have spoken collectively on the need to raise advertising rates, but when it comes to actually charging advertisers more, publishers are proving far more cautious.

More than 12 days after the Indian Newspaper Society (INS) advised member publications to levy a 15% surcharge on advertising from August 1, most leading English, Hindi and regional publishers are yet to implement it. The hesitation reflects a familiar dilemma for print: rising input costs are squeezing margins, but raising rates in a competitive advertising market could cost publishers the very business they are trying to protect.

The INS advisory, issued on July 22 following its July 17 Executive Committee meeting, cited sharp increases in domestic and imported newsprint costs and escalating operating expenses. The recommendation was intended to give publishers a collective mechanism to pass on at least part of those costs.

But the market response has been muted. “Though market conditions are tough, competition is cut-throat and there is pressure from advertisers, we have decided to keep it at bay for some more time,” said a senior publishing executive, reflecting the reluctance among publishers to impose the increase at a time when every incremental advertising rupee is being contested.

e4m reached out to all leading English and Hindi publications. Off the record, they admitted that they have not yet implemented it.

The Hindu has also not implemented the surcharge yet, according to Sundar Kondur, Chief Revenue Officer of the Chennai-based group.

Mathrubhumi Managing Director MV Shreyams Kumar said the group has not implemented the surcharge so far. In Kerala, he said, newspapers have largely held back.

An MD of a leading magazine publication, requesting anonymity, said the surcharge was more relevant for newspapers than magazines, given the different cost structures and market dynamics.

INS President Vivek Gupta did not respond despite repeated requests.

Also read: Can INS prescribe ad pricing? 15% surcharge advisory sparks debate over market autonomy

Can print command premium without a currency? INS' ad surcharge reignites IRS debate

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

Festive season complicates the equation

For regional publishers, timing has emerged as an additional deterrent. Onam (16-26 August), which is one the largest festivals in the state, has made the timing particularly sensitive, publishers said.

Onam marks the beginning of the festive season in India which is followed by Rakshabandhan, Ganesh Chaturthi, Navratra and Diwali. The festive period is among the most important advertising windows for regional media, with advertisers across retail, auto, jewellery, FMCG, consumer durables and local businesses stepping up their presence.

“Most advertisers seek heavy discounts during the festive season. This has been a long-standing tradition. We are not in a position to demand a rate hike at this point of time even as the situation demands it,” said a leading publisher.

For publishers, the risk is straightforward: a 15% increase may improve yield per insertion, but could also trigger negotiations, discounts or a reallocation of budgets at precisely the time they want volumes to rise.

The varying responses underline the central problem with the INS recommendation: while the cost pressures are common, publishers do not have identical pricing power.

The market is saying something different

The reluctance also exposes the gap between publishers' need for higher yields and the market's willingness to pay them.

Publishers have argued for years that advertising rates have not kept pace with rising newsprint, printing and distribution costs. Yet individual attempts to push through rate increases have often met resistance from advertisers and agencies. The INS advisory was, in part, an attempt to create collective momentum around that long-standing problem.

But collective intent does not automatically translate into collective pricing power. The CMO of a leading FMCG player said, “Newspapers and TV media spaces are bought and sold on demand and supply. Here, the market decides the rates, not the publishers’ body.”

Marketers insist that advertising rates are determined by a combination of readership, circulation, market position, inventory, category demand and advertiser relationships. A national English daily, a dominant Hindi title and a regional publication do not necessarily have the same ability to pass on a 15% increase. This was one of the key concerns raised by advertisers and agencies when the INS advisory was announced.

“If a publication can justify a higher price through its audience quality, readership, content and effectiveness, media buyers will pay for it. But pricing should ideally be a bilateral decision between the buyer and the seller, not something prescribed by a third party,” an ad executive said.

The absence of the Indian Readership Survey further complicates that conversation. Nearly seven years after the last IRS, advertisers still lack a universally accepted readership currency with which to benchmark audience size, quality and incremental reach across publications. Rajiv Dubey, Vice President, Head of Media and Head of Brand Activations at Dabur India, has argued that this weakens print's ability to justify higher rates.

For publishers, however, the counterargument is that their commercial value cannot be reduced to a single readership number. Trust, editorial influence, premium environments and the ability to deliver impact around major events remain part of the proposition.

INS President Vivek Gupta has defended the surcharge on precisely those grounds. In an interaction with e4m earlier, he described the 15% levy as a temporary measure rather than a permanent increase, arguing that newspapers should not be expected to absorb inflationary costs when businesses across sectors are passing higher costs on to consumers.

“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 said. He also stressed that INS was acting as a facilitator and guide, not prescribing prices to publishers.