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2012: Fighting for change in the media and ad biz

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2012 proved to be a year when the broadcasters, media and ad agencies were fighting for change. The year began with the hunt for a TV ratings system that would take care of the changing environment and the launch of the Broadcast Audience Research Council (BARC) was announced that would be acceptable to all the stakeholders of the industry.

Another head turner event came in the form of NDTV filing a case against TAM and its holding companies in the New York Supreme Court. The move opened conversations regarding the reliability of data provided by TAM and saw the industry bodies converge and work in tandem with the ratings agency to improve the state of affairs.

It was a dull year for media spends as a poor GDP growth rate dampened the market sentiment which ultimately led to the advertisers tightening the purse strings. As a result, the advertising expenditure forecast was downgraded at the half year mark. The festive season also failed to lift the spirits in the ad market.

Even as the industry was battling ad slowdown, the Telecom Regulatory Authority of India (Trai) came up with its ill-timed ad regulation that had the broadcasters, particularly news channels, up in arms. Trai’s attempt to regulate ad duration on television though could not fructify as Tdsat stayed its implementation till further orders.

Taking advantage of the wave of creative entrepreneurship that has hit India in the past few years, global media communications conglomerates came shopping to the country. Publicis led the pack with four acquisitions in a year while Dentsu snapped up the prized Taproot.

Ad slowdown

 -GroupM downgraded India‘s ad expenditure growth to 6.6 per cent in 2012. It revised India‘s advertising expenditure in July 2012 to Rs 355.92 billion, from its January estimate of Rs 373.97 billion.

 -As per the GroupM report for TV, the Telecom category cut down spends substantially in the first half of the year. Financial services were adversely affected by poor market conditions here as elsewhere in the world. Even consumer durables spent less in the first half of 2012 than the prior year period.

- During the festive season in October, the ad spends were not as anticipated. The slowdown since the beginning of the year did not see any remarkable recovery.

NDTV v/s TAM

-The legal dispute between NDTV and TAM Media Research, India‘s sole TV audience measurement agency, speeded up the movement towards the setting up of Barc. Incidentally, this was the first time that an Indian broadcaster went to the court against the ratings agency.

-On 26 July 2012, New Delhi Television (NDTV) moved the court against TAM, its parent companies Nielsen and Kantar Media Research and senior officials of the companies. The case was filed in the Supreme Court of the State of New York.

- NDTV claimed that TAM is employing an inadequate sampling size for the Indian market, and also of using inadequate security measures to protect its data.The Indian broadcaster also alleged that the lack of security led to an atmosphere of widespread corruption, with different networks bribing sample households to watch them.

-The NDTV lawsuit in New York against TAM Media spurred the pubcaster to join hands. Prasar Bharati blamed the current television ratings system for not being able to capture Doordarshan‘s audiences in its correct light, despite the pubcaster enjoying the largest reach in the country.

-Though the allegations were not conclusive, it also led the Advertising Agencies Association of India (AAAI) and Indian Society of Advertisers (ISA) to arrange a meeting with TAM officials on 16 August to understand directly from the ratings agency what the facts (regarding the NDTV lawsuit) were.

-As a result of the meeting, TAM outlined six key action steps it would take to correct the shortcomings in its current system. These included: appointment of a security officer and agency; expansion in number of meters in the existing 6 top metros; a review by the industry of research processes that determine what TAM reports in its weekly reports; what meter homes are left out of reporting for being data outliners; getting the homes independently audited; faster panel rotation; and an internal audit team to be put in place as soon as possible.

- WPP and group firms filed for dismissal of lawsuit against them.

-The final word is yet to come from the court on the validity of NDTV‘s charges.

BARC

-Even as the legal discourse continued, the stakeholders were busy shaping up BARC.

-In March 2012, the IBF, ISA and AAAI announced the launch of Broadcast Audience Research Council (BARC), with IBF holding 60 per cent, and AAAI and ISA equally holding the balance 40 per cent.

-Government asked IBF, the AAAI and the ISA to ensure adequate representation to Prasar Bharati.

-Barc formed a three-member technical committee comprising IPG Mediabrands India CEO Shashi Sinha, India TV strategist Paritosh Joshi and Unilever head of CMI South Smita Bhosale.

Deals dot the landscape

-The biggest acquisition made in the year was the buyout of creative hothouse Taproot India by Japanese communications major Dentsu.

-Aegis Media, which was bought by Dentsu, acquired performance marketing and search agency Communicate2.

-The multinational agencies shopped more for Indian digital firms. WPP’s JWT Singapore acquired 51 per cent stake in Hungama Digital Services.

-Publicis Groupe’s Leo Burnett snapped up Indian digital agency Indigo Consulting in April to enhance the ad agency’s digital capacity in India. Continuing with the inorganic growth route, Publicis bought out digital agency Resultrix. And it ended 2012 by gobbling up iStrat and Marketgate.

-The publishing arm of Bertelsmann AG Gruner + Jahr acquired digital agency Network play in March. Networkplay, in turn, acquired mobile ad network company Seventynine in November.

A Few Key Movements

-Vikram Sakhuja, CEO of GroupM for India and South Asia, was appointed as global CEO of Maxus in August. It was the first time that the CEO of Maxus was to be based out of India and it is also the first instance where an Indian has been appointed the global CEO of a media agency.

-Shashi Sinha appointed IPG Mediabrands India CEO as Lynn de Souza quit as CEO of Lintas Media Group to pursue social entrepreneurship.

-CVL Srinivas quit Starcom MediaVest Group (SMG) as CEO and joined GroupM to succeed Vikram Sakhuja as its South Asia CEO.

-Punitha Arumugam quit Madison Media to join Google India as Director - Agency Business.

Ad regulation

-The Telecom Regulatory Authority of India (Trai) came out with a consultation paper on ad regulation that capped ad duration at 12 minutes per hour for free-to-air (FTA) channels and six minutes per hour for pay channels.

- Broadcasters lashed out at Trai for the ‘untimely’ ad regulation amid fear that regulation will have an adverse impact on business models particularly news and sports.

-Notwithstanding opposition from broadcasters, Trai notified ad regulation at 12 minutes per clock hour, asking broadcasters to maintain a minimum time gap of at least 15 minutes between two consecutive ad breaks and 30 minutes in case of movie channels. Sports channels could air ads only during breaks (eg during half-time or after an over).

-Aggrieved News Broadcasters Association (NBA) challenged the Trai regulation in Telecom Disputes Settlement and Appellate Tribunal (Tdsat), which stayed the implementation of ad regulation for five weeks.

-The sector regulator told Tdsat that it was willing to discuss the ad regulation issue with broadcasters and would look into their grievance.

-Tdsat directed Trai not to implement the ad regulation till further orders.

-Trai softened its stance by proposing to delete the clause that required the gap between ads.

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