Broadcaster-advertiser face-off perils industry growth

With the imminent implementation of the 10+2 ad cap, carriage fees and now, advertisers pulling out ads, broadcasters are looking at significant loss in revenues

e4m by Abid Hasan
Updated: Jul 16, 2013 8:42 AM
Broadcaster-advertiser face-off perils industry growth

Time is running out for the seven broadcasters who opted for monthly television ratings, with the 24-hour deadline to switch back to weekly ratings ending today (July 16, 2013).

As reported by exchange4media on July 15, top advertisers such as HUL, P&G, Colgate and Dabur have already sent their cancellation orders, pulling out their ads.

With the imminent implementation of the 10+2 ad cap, carriage fees and now, advertisers pulling out ads, broadcasters are looking at significant loss in revenues.

If we were to estimate the ad revenue loss to the broadcasters, it is expected to be roughly 14-15 per cent, when calculated on a weekly basis. Since the ratings will be calculated on the CPT format, the per day average loss amounts to around 2.73 per cent. On an average, a channel earns around 2.5 per cent of its annual revenue in a day. Assuming that 70 per cent of its clients choose to go off air, the channel will lose around 2 per cent revenue per day. For one week of blackout, the channel stands to lose 15 per cent revenue, pretty much the entire year’s projected growth gone in one week.

Advertisers seek to cover ground
On the other hand, advertisers have been holding steadfast on weekly release of ratings data. The advertiser community is miffed at not being consulted when the decision was taken by the select broadcasters to shift to monthly ratings.

Giving the advertisers’ point of view, Devender Garg, Senior Executive Director (Consumer Care Business), Dabur India said, “As advertisers, we have been voicing our discontent with the decision of some broadcasters to opt for monthly release of TAM ratings. In the absence of clarity from TAM on reverting to the weekly reporting of ratings, we are suspending all ads for the time being and are studying the situation to chart the future course of action. The fact remains that in the absence of any TAM data, it will be difficult for advertisers to plan their media strategies and schedules.”

Echoing Garg’s views, Media Advisor and President EMM, Pradeep Iyengar, affirmed, “In a scenario where we should be talking about day-to-day monitoring of TV ratings, thanks to the dynamic medium, we just cannot afford to go back to the monthly system. It will have huge ramifications on big advertisers’ planning target, which are closely monitored on a weekly basis.”

Options are limited
Analysing the situation, only two solutions emerge. The first option involves the broadcasters who have opted for monthly ratings reverting to weekly ratings, which will bring an end to the dispute.

Second option is TAM Media working out a mid-way solution that is acceptable to both advertisers and broadcasters. 

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