Aegis Group plc chairman India & CEO South East Asia Ashish Bhasin does not mince his words when he says. "In the next 24 to 48 hours many broadcasters are going to be getting cancellation notices from advertisers for spots booked with them. I have been getting SMSes from some of my key advertisers to move ahead with pulling off ads from TV."
Adds Group M South Asia CEO & Advertising Agencies Association of India (AAAI) executive committee member C.V.L Srinivas: "Starting yesterday, cancellation notices have been going to broadcasters from advertising clients across the board."
"Earlier broadcasters took the decision and now advertisers are doing so," adds IPG Media Brands CEO Shashi Sinha.
The CEO of a channel confirmed that his network had received emails concerning 10-11 clients. "They have given us 72 hours to resolve the issue. If we fail to revert to weekly ratings all release orders for TV spots will stand cancelled," he says.
That is the state of Indian media today. A battle royale is brewing – some call it the mother of all battles. The two warring parties – on one side of the battle line are the advertisers, and on the other are the seven broadcast TV networks.
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| Group M's CVL Srinivas says advertisers will stay away from TV until they get proper weekly viewership data |
The decision Sinha is referring to relates to these broadcasters unilaterally ordering TV ratings agency TAM Media to change the frequency of reporting on their viewership from a weekly routine to a monthly routine. And to also report those details in absolute numbers, not in percentages.
The seven broadcast networks have more than 100 channels under their umbrella, accounting for almost 50 per cent of daily TV viewing in India.
Advertisers on the other hand have a war chest of Rs 14,000 crore which they pump into TV channels annually to promote their products and services to TV viewers who are their consumers. And almost 60-70 per cent of that goes into those seven broadcast networks.
"I don‘t know see why there should be a need for anyone to have a confrontation at this time," expresses Bhasin.
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| Aegis Group‘s Ashish Bhasin says advertisers would prefer to put money in the bank then advertise in this situation |
In fact, the broadcast industry has been increasingly flexing its muscles in recent times. While they are competing for viewership with each other daily, they have over the past four or five years increasingly bonded together, finding common cause on issues which are plaguing them. Whether it was on the cable TV carriage fee burden or self-regulation or digitisation, the broadcasters have stood united and lobbied hard to get their views heard and get decisions taken in their favour.
One of the issues with the ad industry was the gross billing issue. This had been a practice for decades followed by ad agencies, and broadcasters for TV spots carried on them. The broadcasters – led by their association the Indian Broadcasting Foundation (IBF)- wanted the practice to be changed to net bills when the income tax department got after them to pay tax for ad agency commission (which was not being paid by them actually but was only mentioned in the bill). Ad agencies – AAAI – resisted this change even though the IBF continually urged them to do so.
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| IPG Media CEO Shashi Sinha says advertisers are now taking their decision |
The IBF then put its foot down and said its broadcaster members would pull out all TV spots from TV channels. Ad agency resistance continued for a couple of days before it melted and agencies, the Indian Society of Advertisers (ISA) and the IBF hammered out a solution, which saw net billings becoming the practice, albeit with a legend of 15 per cent commission attached. To media observers, it clearly showed who had the power – broadcasters.
"Agreed that broadcasters had their way in the net billings case because it related to a routine mechanical exercise which did not impact advertisers. It only concerned agencies and broadcasters," explains Bhasin. "But this time it is the advertisers themselves who are being impacted."
Adds Srinivas: "And advertisers are saying, we will not advertise on those channels for which we don‘t have data. We as their agencies cannot plan on a monthly basis without data and hence are complying with our clients."
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| Madison Media COO Karthik Laxminarayan cautions that aggression is not a solution |
"The key thing is that these days advertising comes in bursts of four to six weeks," points out Bhasin. "And if reporting is going to come after the period is over, how will advertisers monitor how their communication is faring with TV viewers? The world is moving to real time reporting of viewing habits. The advertiser has a right to know how the money he is spending is faring and whether it is getting him results. With the monthly reporting, it will not be efficient."
"India and Vietnam are the only two nations which don‘t have a daily ratings system," adds Srinivas. "And now we are talking about going monthly. It is a retrograde step and it has been pushed through without any logic."
Bhasin points out this time the broadcasters are a divided lot too. "While these seven broadcast networks are demanding monthly reporting and monitoring, the others are still going with weekly reports," he says. "How can you have two sets of practices in the same sector?"
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| Vivkai Exchange CEO Mona Jain: Advertisers will blink first |
But the fact that the broadcasting industry is divided is going to work in the advertisers favour. "I don‘t know why there is this misconception that we cannot do without these 100 channels," says Srinivas. "This is a myth. We can do good media plans and reach our customers even without these channels. There are another 200 channels we can use. And they have said they are more than willing to do deals with us. DD could be a good option."
He also believes that advertisers are going to start putting their money into other media outlets like below the line, print, and digital. "The floodgates are going to open for digital advertising. We have seen so many clients talking about using digital media over the past month ever since the TAM issue has broken out. And over the past 24 hours two clients have totally shifted from TV – one to a print plan and the other to a digital one. Agreed one of them is a niche player, but the advertising mindset is changing."
Agrees Sinha: " What are the alternatives left for advertisers? Some might go to print, some might stay away or some might even come back to TV, no one knows what will happen until and unless both parties talk it out."
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| Havas Media MD Mohit Joshi says it is a lose-lose situation for all |
Bhasin believes advertisers might also choose to totally do without advertising and straightaway add the money saved to their bottom lines "And in this tough economic times, it is better to have cash in the bank then spend it," he says.
"It‘s true," points out Srinivas. "Advertisers would rather not advertise than advertise without any data. One or two months without advertising is not going to break any brands. There are even more efficient ways to reach customers than TV."
What has left most media professionals confused is the hard stance taken by broadcasters. "I agree there could be genuine problems with TAM. But how is 30 days for reporting ratings better than weekly ratings when the data is not trusted by them? There is no logic to the broadcasters‘ stance. This is not a banana republic where you turn things on and off as it suits you," says Srinivas.
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| ISA media committe head Hemant Bakshi will be playing a key role |
The question on the top of everyone‘s minds is: who is going to blink first and how long will the difference of opinion continue between broadcasters and advertisers? According to Bhasin, the basics of any business is "the client is always right. I think, within a week, better sense should prevail and things should get sorted out."
Srinivas is not willing to speculate on the time period but says advertisers will stay off the TV channels until they start getting the weekly data they seek.
"Obviously advertisers will blink first. Where will they get such a mass reaching medium," says a TV channel CEO. "They came running back to us on the third day during the net billings crisis when we blocked them out for two days."
Vivaki Exchange CEO Mona Jain believes that "there will be some kind of a push back wherein it will be the advertisers who will have to compromise."
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| Lulla says it is a private matter between broadcasters and advertisers |
Others highlight that the combative attitude should give way to finding solutions. "We, as an industry, should not think aggressively but progressively; and try to resolve it by having a healthy discussion," expresses Madison Media COO Karthik Laxminarayan.
Havas Media India MD Mohit Joshi says that on a personal level, "I am sad that all of us together are not able to find a solution. All such issues are in a lose-lose domain. Nobody is actually going to gain. Broadcasters could end up losing revenue."
Indiantelevision.com got in touch with ISA media committee chairman Hemant Bakshi to get the advertiser perspective and he said he would prefer not to at this stage.
Ditto with broadcasters. Indiantelevision.com got in touch with Star India CEO Uday Shankar, Viacom18‘s Sudanshu Vats, Times Television Network CEO Sunil Lulla for their views. All of them refused to get into any discussion. "This is not a matter for public scrutiny. It is a private matter which has to be resolved between broadcasters and advertisers," says Lulla.
For their individual sakes, hopefully they will do so soon.
