The Hindu Business Line : Ad rates for TV may rise with air time stipulation

With airing time of advertisements on television channels to be stipulated in the coming months, industry observers are expecting a 10-15 per cent hike in ad rates across channels, especially in genres such as news, sports and films which depend a lot on advertising revenue.

"Advertising spots for a hit film being aired on a film channel or a India-Pakistan match on a sports channel could be even higher than the expected 10-15 per cent hike," says a spokesperson of a media research agency.

A hike in advertising rates, according to observers, would lead to more advertising innovations, a rise in quality of creative as well as more scientific planning of spots. "The advertisers and media planners will now work more closely as the pressure on ROI would be much higher," says this media research agency spokesperson. The new rule, when it comes, will stipulate that channels can have only 10 minutes of advertising per hour and an additional two minutes for ads for social causes.

Time to be precious

While the ad clutter in-between programmes would be considerably reduced and time would become more precious than ever before, Mr Atul Phadnis, Chief Evangelist, Media e2e, says that product placements would become a powerful avenue for newer revenues to come.

However, Ms Punitha Arumugam, CEO, Madison Media, doesn't see too many repercussions of ad time stipulation on the channels. "Stipulation was always there and big networks such as Star have always adhered to the norm. Only those channels which have not adhered to the earlier norms would be impacted. The film channels and regional channels will be affected. And, they have to do smarter things to mop up the revenue, as advertisers may not be willing to pay a premium to a regional channel or a movie channel," she adds.

Similarly, Mr Paritosh Joshi, Director, Advertising Sales, Star India, says, "As far as utilisation of commercial and promotional inventory is concerned, we are already working within standards. We will not get materially impacted, in fact, the impact on us would be quite low."

Hike may not be uniform

Mr Joshi doesn't rule out a hike in rates across the industry, but he says that the hike wouldn't be uniform. "The hike would be based on the supply and demand of a particular channel. For a news channel, for instance, the hike would happen in the late evening or early morning slots when viewership is at its peak."

He says that news channels and free-to-air channels, which have more inventory utilisation, will witness a softening of revenues for a short period of time, which, according to him, they would eventually put under check.

Mr Amit Jain, Managing Director, MTV India, says that this stipulation would not really impact too many channels, as there aren't too many channels selling more than 10 minutes of airtime per hour. "At MTV, we are already in the process of cutting down on ad airing time, as our focus is on offering our clients a more 360-degree brand solutions."

Giving an ad agency perspective, Mr Pratap Bose, CEO, Ogilvy & Mather, says that while ad rates would definitely be hiked, the advertising agencies' income in terms of billing will not be affected. "With the number of spots being reduced, the task of agencies would be to come up with more effective creatives."

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