10+2 ad cap will ensure more bang for the buck: Experts

Discipline, innovation, improved content quality and increased focus on RoI are few ways in which the 10+2 ad cap will change the industry for good

by Abhinav Trivedi
Published - Jun 4, 2013 11:08 AM Updated: Jun 4, 2013 11:08 AM
10+2 ad cap will ensure more bang for the buck: Experts

The 10+2 ad cap development has taken the industry by storm. TRAI notification of curtailing advertisements duration in an hour to 12 minutes may have been opposed by many broadcasters, but the trend, according to media experts, will work for the betterment of the broadcast industry.

The ad cap will adversely affect broadcasters’ earning prospects, which generate around Rs 14,000 crore by selling inventories. There will be a short fickle on the revenue side, but the mandated act will bring discipline in the way advertisements are distributed across TV channels.

“I think the 10+2 ad cap will work hugely for us. Firstly, it will impart discipline in the promo duration. Two minutes of every hour are dedicated to self promotion, which works very well for a broadcaster like us. So from marketing and business perspective, this is very good for niche channels,” said Sangeetha Aiyer, VP and Head - Marketing, A+E Networks, TV18.

She added, “Revenue augmentation would become slightly difficult for us. Therefore, channels will have to rely more on innovation. This would in a way improve the quality of the overall content, which is again good for channels like us.”

Subhadarshy Tripathi, Business Head, ZEE-Q said, “Special interest channels will tend to gain in this scenario due to focussed marketing. There will be a lot of media buyers who will also focus on niche channels rather than going all out on GECs.”

Improved content
As the above two broadcasters mentioned, channels will have to work on innovation factor to garner revenues. This is likely to affect content strategy. A creative head of a GEC on condition of anonymity shared, “We are under immense pressure to make quality content for all the slots, and not just prime time. My channel has hiked the ad rate due to the regulation. Hence, if we don’t give viewers to our advertisers, the rationale is nullified. We were expecting a change, but the 10+2 ad cap has unknowingly given an impetus to increase the content quality.”

Although it is assumed that the GECs will be most affected with the entire act, media experts believe that the most affected genres will be music channels, news channels, and movie channels (Hindi).  Anindya Ray, GM, Loderstar UM said, “These channels have assumable 20-24 minutes of ad duration in an hour. If there is any genre that is likely to be affected post the ad cap, it is these channels. Major GECs are almost close to 12 minutes of advertisement timeline, over and above.”

Ad rates pumped up
Of-late, most broadcasters belonging to the GEC genre have increased their ad rates. “Such a trend is likely to gain in the coming times. I won’t be surprised if niche channels also follow suit. This will not only bring more accountability from their end but will also make advertisers more cautious,” said Vishal Shekhar, independent media analyst.

According to the creative head mentioned above, channels in order to compensate the revenue, will increase the inventory cost of all the slots (including non-prime time). There is a huge possibility that the content strategy of the channels will have a major change.

“They will be more liable to justify their ad rate increase; therefore, they would have to produce more innovative content to sustain the viewership as well. Advertisers would look for RoI now. If there is no audience, they would not cater to the increased inventory cost from the channels,” added Shekhar.

Apart from shift in the content strategy of the channels, advertisers will be well planned. Market experts feel that the last minute advertisers are likely to be most hit from the ad cap. The entire ecosystem of advertisers-broadcasters-viewers would be more accountable and less cluttered.

Rahul Johri, SVP and GM – South Asia, Discovery Networks, Asia Pacific said, “Our core mission is to satisfy viewers with the highest quality and entertaining programming. We are equally committed to offer the maximum value to our clients who continue to appreciate Discovery's networks’ efficient and effective inventory.”

Focus on RoI
“The experimentation module is likely to shift from efficiency to effectiveness. Earlier advertisers were used to buying the inventory at the best negotiated price, now the trend is going to extend to the best returned price as well. People will get more cautious, and trials and effectiveness models will come to decline. Channels whose ratings are not competent will not survive,” said Ajit Varghese, Managing Director, South Asia, Maxus.

As far as the audience traction is concerned, market experts deny the shift. Due to digitisation, the viewership of Special Interest Channels (SICs) is likely to increase, but the audience profile is likely to remain the same. Therefore, advertisers will continue catering to channels that they were doing earlier. Only accountability would be enhanced.

“Marketers catering to mass audiences will advertise mostly on GECs. The quantity of ads would reduce, but there won’t be a change in objective. As far as SICs are concerned, they might gain some new advertisers, but not because of 10+2 regulation, but because post DAS, there is a surge in their viewership numbers. They have started to make their presence felt. Although their TG is well defined and highly focussed, their numbers would increase with time only, as most of the households in India are single TV households,” said Ray.

Experts believe that although the timing of the ad cap may still be debated as DAS has not started delivering robust benefits for the industry and the industry is not prepared for this regulation at the moment, they are optimistic that the cap will foster healthy industry prospects irrespective of the timing of its implementation.
 

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