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Ad time cap on TV, a ‘double-edged sword for advertisers’

Meenakshi Verma Ambwani Delhi | Updated on September 02, 2013

While general entertainment channels had been showing 13-15 minutes of advertisements an hour, it was 20-25 minutes of ads an hour across news channels. — M. Vedhan

Even as the tussle is on between broadcasters and the telecom and broadcasting regulator over the 10+2 minute cap on advertisements, media buying experts believe this is a double-edged sword for advertisers. While the ads may become more effective, their rates could go up, they feel.

As of now, the telecom tribunal, TDSAT, has stayed the implementation of the cap on ad time till November on a plea by news broadcasters. Earlier, the Telecom Regulatory Authority of India had said that by October broadcasters had to ensure that they show 10 minutes of commercial ad breaks an hour and devote two minutes for in-house promotions.

Talking about the future of television advertising on the sidelines of the recently concluded design conference Kyoorius Designyatra 2013, Madison World Chairman and Managing Director Sam Balsara told Business Line, “It is a matter of fact that the effectiveness of television as an advertising medium has been sharply going down. One of the problems is the huge amount of fragmentation that has taken place. Also, the clutter has gone up dramatically. The effectiveness of an ad is directly proportional to the number of ads showing during a break,” he added.

NEWS CHANNELS

While general entertainment channels had been showing 13-15 minutes of advertisements an hour, it was 20-25 minutes of ads an hour across news channels.

“The 10+2 is a double-edged sword for advertisers. On the one hand, the effectiveness of the released ad will go up dramatically, while on the other, it will lead to inflation, with broadcasters looking to hike ad rates. The increase is going to be equivalent to the reduction of the inventory, which will upset the equilibrium of the industry,” he said, adding that “though television is an extremely cost-effective and impactful medium, I believe it will continue to remain so for some time.”

With the ongoing economic slowdown, advertisers seem to be cautious about spending. Asked about the outlook for the industry, Balsara said, “We had in the beginning of the year projected a 9 per cent increase and, as of now, we have not revised that. But the economic growth rate, rupee volatility, the threat of a Syria war and the coming elections will impact ad spends. But my advice to large advertisers is that they should be cautious, but any kind of cut on ad spends may make them lose market share. And if you lose market share at this point, it is going to be difficult to get it back.”

With media and entertainment groups, such as Zee and Times Now, on channel launching sprees, Balsara believes it is an attempt to take advantage of the expected shortage of advertising time and put out more inventory that will occur when the ‘10+2’ regime is implemented.

digital platform

Meanwhile, several speakers at Kyoorius Designyatra were optimistic about the growth of the digital platform for branding and advertising. Digital ad spends have been growing at 30 per cent year-on-year and are expected to grow at a faster rate of 35 per cent this year, with most big advertisers spending almost 10 per cent on digital platforms. Balsara believes that big spenders, such as fast-moving consumer goods, waking up to the potential of digital platforms augurs well for the digital segment.

Meenakshi.v@thehindu.co.in

Published on September 02, 2013

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