INS warns ad agencies from quoting speculative rates of media during pitches

The Indian Newspaper Society (INS) has issued an advisory, where it has pointed out the unfair business practices being indulged in by some advertising agencies. The industry body has also warned of taking strong action against the erring agencies. 

In its advisory issued, the INS stated, “Some of the advertising agencies are indulging in unfair business practices and pitching for clients by giving heavily discounted rates on behalf of member publications of the INS, without getting such rates approved by the publications concerned.” 

The industry body pointed out that such activities were against the Accreditation Rules of the INS, which by agreement, agencies are bound to follow. It further said that that such activities also went against a decision taken by the Advertising Agencies Association of India (AAAI), binding on all its members at an Executive Committee meeting, effective from November 15, 2018. 

In its circular issued on November 2, 2018, AAAI had informed its member agencies that its Executive Committee had unanimously decided that the practice of quoting detailed media rates for pitches was not a healthy industry practice. “It is tantamount to quoting speculative rates on behalf of the media, which is contrary to our commitment of promoting fair business practices between our members and media houses,” AAAI stressed it its circular, while adding that both the Indian Broadcasters Foundation (IBF) and INS supported this view. 

In the guidelines laid down for its members, which came into effect from November 15, 2018, the AAAI Executive Committee prohibited its members, while pitching for any new business, from quoting rates for: 

• Any individual channel or publication 

• Any genre of media – for example, Hindi GEC, regional TV newsor English dailies 

• Any media group/ channel bouquet/ channel cluster 

• Any time band or day part 

• Any specific geography 

• Any specific rates for any media vehicle in TV or print 

However, “in the spirit of fair competitiveness, for pitches, members are at a liberty to make proposals for savings that they believe they can achieve – provided that such commitments are made at a medium level (Total TV savings or Total Print savings),” the circular added. 

Though this AAAI circular is of 2018, INS has issued this advisory again as it has found that agencies are still quoting speculative rates of media during the pitch. 

The INS, in its advisory issued further said, “Irrespective of the action AAAI may or may not take against the agencies concerned, all the agencies are advised to refrain from indulging in such practices, failing which INS will be constrained to take strong action, not limited to issuing a Notice of Disaccreditation, for which the agencies concerned will responsible for all the consequences thereof.”