The Telecom Regulatory Authority of India’s (TRAI) decision to restrict television ads to 12 minutes an hour may be a boon for the print and digital media. Television channels generate about Rs 16,000 crore a year in advertising revenues. With television ad rates set to soar by 30 per cent, media agencies say print is set to benefit from the spill-over effect compared with the digital media.
Hike in ad rates
“Four top general entertainment channels — Sony, Colours, Star Plus and Zee — have decided to increase their ad rates by 30 per cent. The cap will have an adverse effect on broadcaster inventories, which could move to cheaper options like print,” said Amarji Singh of Oasis Media, a media buying agency.
Anita Nayyar, CEO, (India and South Asia), Havas Media, told
With brands forced to relook their strategy, multinational media agencies who buy airtime for corporates feel the Government diktat will be challenging for ad agencies and advertisers who will need to draw up new brand strategies that largely favour print.
Though the policy is to be implemented in a phased manner from October 1, 2013, regulation is set to ensure more ads flow into print and the digital medium, said a senior official at Group M.
Radio, branded content
Nayyar said radio and branded content may also benefit. “It will depend on what catches the eye of advertisers. Given the fact that there will be limited inventory, most advertisers will have to rethink their strategy,” she added.
The cap is also expected to sound the death knell for smaller television broadcasters, especially news broadcasters who continue to depend on ads as the main revenue source.
Alankar Garude of Edelweiss Financial said smaller advertisers may not be able to bear the burden of increased ad rates on television and may be forced to shift to other mediums.
TRAI had held that ads on TV channels should be restricted to 12 minutes an hour (10 minutes of ads and 2 minutes of promotions) as they affect the quality of viewing.
However, Nandini Dias, COO at Lodestar UM, told Business Line that all TV ads may not necessarily go to print. “With the ad cap, the clutter on TV will come down and companies will ask for a larger share-of-voice. This cannot be translated easily to print,” she said.
But, some broadcasters played down the effect. A senior official of a leading general entertainment channel (GEC) said the ad inventory was not interchangeable. “Though the shift from print to digital is easier given its synergy, there are several clients on TV, like financial companies and fast moving consumer durables, who would find it tough to shift ads to print,” the official said.