AD Discounts: Decoding The Real Problem

The biggest sufferers are the middle and bottom rung of broadcasters, while advertisers are having a joyous time, making their agencies fight to get the best rates

- S Yesudas

Industry reports on the Television sector suggest that there is 65% growth in eyeballs over a six-year period (2012-2017), while various estimates point to overall TV advertising spends growing over 80% during the same period. Even the number of channels grew from 425 to 650, as covered in Adex. The profitability and share prices of listed broadcasters have also been growing. While the current argument is about media agencies making upfront discount commitments to advertisers in a pitch, without prior approval from broadcasters, I prefer to analyse the topic a bit deeper.

THE BROADCASTERS

I believe the top Broadcasters are sitting pretty. No agency is quoting rates to its clients out of the set precedents and perhaps some small leeway, as the agencies also know that the large broadcasters cannot be arm-twisted beyond a point. The biggest sufferers are the middle and bottom rung of broadcasters. While advertisers are having a joyous time, making their agencies fight to get the best rates, I don’t think they understand the potential value they are losing out on.