News broadcasters look to hike ad rates as ratings make a comeback
While some networks have already hiked the rates in view of the upcoming state elections, others are expected to follow suit now
Buoyed by the resumption of news ratings and the upcoming state assembly elections, news broadcasters are looking to hike their ad rates. While some networks have already hiked the rates in view of the elections, others are expected to follow suit now as the government has given the green signal to release news viewership data.
The resumption of news data is expected to come as a shot in the arm for long-tail channels as big news networks did not see much impact from rating blackout in the last 15 months.
Republic Media Network CEO Vikas Khanchandani said that the resumption of news data will bring incremental advertising revenue into the genre. “Republic Network is extremely pleased that the ratings are commencing again. The NBF team and its members have been representing all the stakeholders for the same for a while. It’s important to provide transparency to advertisers and agency partners and the absence of data has been a huge concern. The ratings will help the genre to bring incremental business from brands that have been under indexing advertising investments,” he stated.
The ad sales head of a leading news network, on condition of anonymity, said the next two months will be like Indian Premier League (IPL) for the news channels as the genre will see an influx of ad monies due to a spike in viewership and the resumption of rating data.
“Since elections are around the corner and news data is coming out it will be good for the broadcasters, especially the bigger ones, to get the right value for the ad inventory. After the rating blackout, the ad deals were happening on the basis of a presumption of the last exit which was October 2020,” the ad sales head said.
He also said that his network has already increased pricing for the next three months by about 25% because the supply is limited while the demand is expected to go up.
“The next three months will be very high-decibel for news. The state assembly elections will be for news channels what IPL is for Star Sports. In any election season, news channels earn at least 8-10% of their overall top line,” he asserted.
He also noted that all news channels will revise their pricing once the data comes out. “Once the data is out, news channels will come out with revised pricing. Supply is going to be more or less the same but what will change the game is pricing. The pricing will also depend on the market share of the channel compared to the last exit.”
The ad sales chief of another news network said that the news channels would have found it difficult to get a rate hike due to the absence of data. However, the news channels will not gain much if the data roll-out gets delayed by 5-6 weeks.
“In the absence of ratings, it would have been difficult to get incremental revenue due to the spike in viewership during elections. The news rating roll-out will help in getting the rates up. However, if the data roll-out happens after 5-6 weeks then it will be a dampener, since by that time, we will be almost done with elections,” the ad sales chief said.
He however said that the benefit of resumption of news data will happen in the next financial year. “There will be demand for ad inventory on news channels and a lot of money will shift from other genres to news due to election. Since our supply is limited, we will be able to command premium pricing. The situation now is such that the advertisers are not willing to give the right price due to the absence of data. Now they will not have that excuse,” the person said.
According to the ad sales chief, the endeavour of all news channels will be to increase the ad rates and the presence of ratings will also help agencies to justify the price increase to their clients. “FMCG will come back because they decreased their spending on news substantially. The share of the news genre has also gone up after Covid-19. The news genre worked well for FMCG during Covid-19. A lot of well-funded start-ups will also look to put in more money on news.”
The revenue head of a news channel pointed out that big networks and news channels didn’t see any impact from the rating blackout. However, the long-tail channels got impacted badly, and they are the ones who will benefit from resumption of news rating data.
“Things would have been much better for the news genre had it not been for the sudden spike in Covid-19 cases. There is a lot of uncertainty around, so clients are in wait-and- watch mode. Some impact is bound to happen since we are not able to meet people due to work-from-home,” he stated.
On the price hike, the revenue head said that his channel has been consistently revising its ad rates upwards. “We have been revising pricing every year but not every channel pushes for rate growth. Many networks have launched new channels to add more inventory. They have failed to get a rate increase from the market,” he stated.
Provocateur Advisory Principal Paritosh Joshi said that news channels have been increasing ad inventory to get growth. However, the increase in commercial airtime has alienated the viewers. He believes that the resumption of news ratings coupled with state assembly elections is a perfect opportunity to up the ad rates.
“They have a big opportunity to increase their ad rates during the state assembly elections. UP election is the biggest opportunity for news channels to get a rate hike. Resumption of news ratings will have a positive impact on the news channel pricing,” he stated.
But he also cautioned that news channels will have difficulty in getting the right pricing in the next financial year if they don’t hike the prices now. “If they don’t hike prices in this financial year, they will ruin their chances in the next financial year also. Without ratings, it is difficult to get the right value from advertisers. News channel ad rates were going up even before the rating blackout,” he added.
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