BBMP’s new ad policy sparks monopoly concerns among Bengaluru advertisers

New Delhi: The Bruhat Bengaluru Mahanagara Palike (BBMP) has introduced a new advertisement policy aimed at generating over Rs 500 crore in annual revenue by auctioning advertisement rights across the city. However, the policy, which lifts a seven-year ban on hoardings, has drawn sharp criticism from local advertisers who label it as "monopolistic" and biased toward large corporations.

The new BBMP Advertisement Bylaws 2024, notified under the Greater Bengaluru Governance Act, were rolled out last month to regulate outdoor advertising, curb illegal hoardings, and boost civic revenue. The policy mandates that advertising agencies pay a Rs 5 lakh registration fee for a three-year license to participate in auctions for ad rights, with rates linked to property guidance values and road widths. 

Only eight companies will be granted advertising rights across Bengaluru’s zones, with each zone awarded to a single bidder, raising fears of market consolidation.

Local advertisers, particularly smaller firms, argue that the policy’s structure heavily favours big players with deep financial resources. “The requirement to pay an upfront fee five times the bid amount is prohibitive for small businesses,” said a local advertiser who attended a recent pre-bid meeting, speaking on condition of anonymity. “The process is designed to edge us out, giving an unfair advantage to large companies, especially those from outside Karnataka.”

The tender process has also come under fire for its complexity. Advertisers must secure a No Objection Certificate (NOC) from BBMP’s advertisement department, which involves submitting extensive business records for verification. Local firms claim this process is time-consuming and cumbersome, as it requires a detailed track record with BBMP. At the same time, new entrants face fewer hurdles, potentially giving them a competitive edge. 

As of August 15, only two applicants had applied for an NOC, despite the looming August 25 deadline for tender submissions.

Critics also highlight the policy’s restriction of ad spaces to private properties, prohibiting placements on public spaces like footpaths and trees. This forces advertisers to negotiate with property owners, a process they say diminishes their bargaining power. Additionally, BBMP’s existing Public-Private Partnerships for bus stands and billboards further limit available ad spaces, consolidating control in the hands of a few.

“The new rules create a monopoly by limiting each zone to one company,” another advertiser noted. “This not only squeezes out smaller players but also reduces opportunities for property owners to negotiate better deals.”

Despite the backlash, BBMP defends the policy, stating it aligns with the Supreme Court-approved Delhi advertisement model and addresses environmental concerns, such as banning single-use plastics in hoardings. A BBMP official, responding to the criticism, said, “The auction process is transparent, and the timeline from July to August 25 provides sufficient time for bidders. The policy balances revenue generation with aesthetic and ecological considerations.”

The Karnataka High Court’s recent directive, issued on October 23, 2024, adds another layer of uncertainty, mandating that the bylaws not be implemented without court approval. This follows objections from stakeholders, including public interest litigants, who argue the policy prioritises revenue over public welfare.

As the August 27 technical bid date approaches, advertisers remain divided. Some see the policy as a necessary step to formalise Bengaluru’s chaotic outdoor advertising landscape, while others fear it will stifle competition and harm local businesses. With the city’s skyline and BBMP’s coffers at stake, the debate over the new ad policy is far from settled.