As the news channels are eying a hike in ad rates ahead of the upcoming 2024 Lok Sabha Elections, advertisers are pushing back against any such move.
As advertisers, they will be willingly pay a premium to a channel only if there is a business reason attached to it, such as offering new or incremental viewers. In addition, the lack of a standard break schedule on news channels is also not a viewer-friendly experience, according to top advertisers.
Will advertisers pay a premium?
According to Rajiv Dubey, Head of Media, Dabur India, one buys the audiences and not a channel per se. Advertisers would go wherever the viewership is. So, if a channel is offering new or incremental viewers, one can consider paying a premium but that is not on offer. An advertiser will pay a premium to a channel or a publisher only once there is a business reason attached to it.
“Currently, I see a very weak business reason because the chips are not in favour of the news genre due to fragmentation and poor viewership - which has been going south for the past two-three years,” he added.
Concerns around inconsistent ad breaks
According to a senior executive at one of the top three advertisers in India, the news channels get considered in a plan to reach out to male audiences (predominantly). These do not add to GRPs at all and play is for visibility. Most channels offer a 33% split between the three broad time bands.
“The challenge is unlike GEC/entertainment channels, they do not follow the 10+2 mins per hour for ad and promo time. Some channels use "in-house governance" and operate at 16 mins per hour ad time. If you watch any news channel - there is no norm for an ad break schedule or duration of the break. In some cases, the breaks run beyond 240-300 seconds and it is not a viewer-friendly experience,” he added.
The executive also stated that most top news channels operate around a rating of 0.1 TVRs across markets clustered at the top 2/4 channels, the second bucket is say between 0.05-0.1 and the third bucket is below 0.05 rating.
Typically, the advertiser depending on the budget will opt for at least two channels from the first bucket and one or two channels from the second bucket. The third bucket is considered if there is some “out-of-the-box idea” that the channel comes up with.
“In all of this, even for a lead news channel, the CPRP will sit in excess of Rs 5 lakh. Some news channels exited from BARC monitoring. If the rate hikes are being asked for, it needs to be justified. What are the channels doing to keep the news ecosystem cleaner and stop the unnecessary sensationalisation race?” he stated.
Meanwhile, Dubey said that a seller can command a higher rate if a product is in high demand and went on to add that, “I don't see a very high demand for news channels at the moment.”
“There's no new content for the viewers and nothing new for advertisers and even no new viewers are coming to the news genre, on basis of which they can command a higher rate,” he said.
“Ultimately, the rates are decided by the market and not the publisher. The market decides the rate based on demand and supply. Certain channels can command higher rates due to their leadership position for a while so maybe they can go out in the market and try their luck,” Dubey said, adding that the election year might bring cheer to the genre and channels on the top of the stack might gain an edge for their marquee properties.
Ad rates hike challenging without real value addition
Megha Beriwala, Vice-President, Marketing, Shyam Steel, said that determining the target audience with reference to the viewership of a news channel is one of the primary factors to keep in mind before selecting a broadcaster for advertisement purposes.
Several bodies, such as BARC, can help one understand the reach, market share and region-wise impact of a particular channel. The TRP of a news segment and popularity of the news anchor is also an important factor to examine as it affects the targeted reachability, she added.
“Considering the number of current news channels and the fact that new broadcasters are cropping up at a rapid rate, it would be challenging for news channels to hike ad rates as there is no real value addition, because the number of viewers remains interchangeable,” she added.
Swati Rathi, Marketing Head, Godrej Appliances, said, “We are keeping an eye on the development along with our media agency. While the current campaign does not get affected, we will evaluate it in future planning.”
“News channels are a relevant platform for durables’ advertising and we will have to check how this impacts efficiency and weigh it against all possible options,” Rathi added.