Advertisers want deals to reflect digitisation gaps

MUMBAI: Advertisers are pressing for structuring of advertising deals with television broadcasters to reflect the likelihood of a section of homes going without cable TV connections in the four metros as the shift to digital delivery of television channels happens from 1 November.

The advertising industry expects about 15-20 per cent of television households to remain disconnected for some period from 1 November. Also, advertisers’ communications in the run up to the deadline for digitisation will not reach to the fullest extent as broadcasters have begun to switch off analogue channels genre wise from 10 October and would end the process of complete withdrawal of analogue TV channels in the four metros on 22 October with the most watched Hindi general entertainment channels (GECs).

Allied Media COO PM Balakrishnan says, “There is lot of thinking happening at the backend. I don’t think advertisers are panicking.
Even the deals are getting structured considering all these things.”

The CEO of a large media buying and planning agency, who did not want to be quoted, said, “Advertisers may do well to analyse the realities of digitisation based on data available and fine-tune their media plans for the festive season.”

The Information and Broadcasting Ministry on Wednesday said an average of 77 per cent of cable TV homes in Mumbai, Delhi, Chennai and Kolkata have switched to digital with the installation of set-top boxes (STBs), led by Mumbai with 99 per cent digitisation. According to the ministry, Chennai is the laggard with 59 per cent cable TV homes converted to digital.

Advertising, particularly by consumer durable companies and automobile makers, peaks during Diwali festival when the consuming class spends the most.

Havas Media India and South Asia CEO Anita Nayyar says, “The timing is very bad. The advertisers and media agencies are not going to be happy considering the environment currently. This was the period when we were looking at some traction at least. This has been a year of reduced ad spends and basically a slowdown year. Now there is uncertainty about the reach of the channels in the metros. The deals will have to be re-packaged.”

Advertising community is also doubtful about the government’s claim of 77 per cent average digitisation in the four metros. Cable operators in Chennai and Kolkata are asking for extension of the digitisation deadline as they fear a significant percentage of homes would be without cable TV connection after 31 October.

Lodestar UM COO Anamika Mehta says, “The economy has been sluggish, so all marketers were looking at the festive period to drive
sales. TV obviously takes the big chunk of advertising. Now on TV many marketers will play safe.”

Adding to this, OMD COO Haresh Shriyan says, “Whatever genre broadcasters will pull out, there are companies which are advertising on it. It will have serious implications on them in all the four metros. All this will certainly reflect on the ratings and reach, if executed. The advertisers now will have two options. One is that if the reach comes down and if the ratings and connectivity is impacted, advertisers will seek to have compensation from the broadcasters. They have paid when everything was normal but today it isn’t. Also, if this is the scenario, if the reach is impacted, if people don’t get to see their ads, the advertisers and agencies need to recommend a boost of plan for these markets.”

There is also a faction of media planners that feels the advertisers need not panic. If the current figures are to be believed, then
the percentage of media darkness will be small compared to the earlier estimates. Madison Media CEO Basab Datta Chowdhury says, “Given the current level of penetration, it is only 20 per cent of homes that will be without cable TV connections. 100 per cent penetration won’t happen, we all know.”

The important point to consider here is what part of the estimated 20 per cent media dark homes constitutes the TG. The advertisers’ ire on the pull out of analogue signals will depend on how much of their TG is being excluded from the reach.

According to Madison’s Chowdhury, there isn’t much to worry in that case. “Right now, we are talking about 20 per cent of the homes (in media darkness). Also, if we extrapolate IRS figures onto the current penetration of digitisation, then it is essentially the Sec D and E homes. Nearly 95 per cent of the communication is targeted at the Sec A B and C viewers,” she says.

TAM’s ratings

If the industry banked on TAM ratings for planning and estimates earlier, the data becomes all the more important now in view of the genre-wise switching off of analogue signals. Nayyar says, “What TAM does post 1 November will be known only after the meeting next week. But till 31 October, TAM should continue giving ratings. This will serve two purposes -- we will know the reality of digitisation figures in the metros. Secondly, we will know how much media darkness is prevalent in the metros.”

Representatives from Advertising Agencies Association of India (AAAI), Indian Society of Advertisers (ISA) and Indian Broadcasting Foundation (IBF) would be meeting TAM Media Research on 15 October to discuss issues arising out of digitisation and the likelihood of some homes remaining without cable TV connections.

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