IBF’s move on pitch discount rates gets agencies, publishers moving towards dialogue

The issue of discounted pitch rate is under the scanner once again with an email sent out by Punit Goenka, Director, Indian Broadcasting Foundation (IBF), last week to all agency heads, wherein they were urged not to offer discounts to clients on behalf of broadcasters without first getting the IBF’s approval. 

While the industry is yet to formally react to IBF’s email, the agency heads and publishers that Adgully spoke to broadly supported IBF’s move. 

A publisher, on the condition of anonymity, remarked, “I think the IBF and Indian Newspaper Society (INS) have taken the right decision and I am hoping that it would be implemented. It’s good for the industry. The agencies will understand and cooperate for the betterment of all.” 

The publisher further commented, “What’s happening is that the industry is now moving from need to greed. For both publishers and broadcasters, their distribution model is not profitable and that’s why they are totally dependent on advertisements. Ad agencies, for their survival and spurred by their own internal competition, start putting pressure on print and broadcast media, which is dangerous. Due to this, the ad rates (in print and TV) will never rise and that’s why they are suffering. The end result is that it will prove harmful to the agencies and to the industry as a whole.” 

As per media reports, the Indian Newspaper Society (INS), under the chairmanship of Hormusji N Cama, has already held discussions with the Advertising Agencies Association of India (AAAI) regarding discounted pitch rates and is expected to take up the issue with the agencies on an individual basis. However, when Adgully reached out, Cama refrained from commenting on the discussions. 

Giving the advertising industry perspective, an agency head who did not wish to be named admitted that he had received Goenka’s email and added, “The letter states that many agencies are quoting rates in their pitch without checking with the channel about the rates. If an agency is doing something like this, it is not the right thing and that’s what he has drawn the attention to. I think it’s a reasonable reason, because if I’m selling someone’s property then I should at least check with him/her on the same. I am assuming that everybody has received the same.” 

Another agency head said that that he was studying the issue after receiving the email. He added, “I understand the sentiment and we will take time to study and understand it. One cannot react immediately. We have to respect what they have mentioned in the email because they are powerful bodies.” 

He further said, “They have given us their point of view, so obviously we will have a dialogue with them and discuss the same to get an appropriate solution for this.”

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