GoaFest 2008: Media owners fight it out over spot values

The fourth session on the first day of the GoaFest debated the topic of which medium is more costly and why. Appropriately, the session was called Bhala Tumhara Spot Mere Spot Se Mehenga Kyun.

The panel included Hemant Malik of ITC Foods, Paritosh Joshi of STAR TV, Abhijeet Pawar of Sakal, Tarun Katial of Big 92.7 FM, R Gowthaman of MindShare and Pearl Uppal of Yahoo.

The session was moderated by Sashi Sinha of Lodestar, who started the discussion with the question: “Why do advertisers and agencies value delivery options differently and is the value for it is realised or not?”

R Gowthamam of MindShare said, “An advertiser believes that value comes when his brand delivers. TRPs, CPRPs are all in-between terminology. Ultimately, it is the fear or the gut which gives the difference between both.”

The radio industry has always complained of being meted stepbrotherly treatment and Tarun Katiyal of Big 92.7 FM reacted strongly, saying, “Television has always enjoyed being on a pedestal and gets away by asking for a premium. Radio cannot do that. The time spent on the radio in the city of Mumbai alone is much higher than that of television and we are talking about 45 stations.”

Sinha then asked why they had lower rates. Has the radio industry undervalued itself? Or is it that the client will never be able to understand how much radio can deliver? Katial commented on this, “It is lack of education – media buyers, owners and also radio stations. I spent two years getting a radio measurement system in place. No one uses it and clients don’t even ask for it.”

Putting things in perspective, Gowthamam of Mindshare said, “Ultimately, the overall adex will not be growing more than 2 per cent of the overall GDP. It is not about TRPs, but the monies you have and how you want to spend them.”

Speaking for the Internet as a medium, Pearl Uppal of Yahoo said, “The Internet is at a nascent stage. Other media have metrics with exposure. Recently, GM in the US has allocated about 50 per cent of its ad budget for the Internet. Metrics are good, but it is about what you are trying to measure. The other media are old and have settled into measurement. For the Internet, there is a bandwidth issue. As per Nokia, if 250 million people with mobile handsets are capable of going online, then anyone can calculate the reach. But both media and creative agencies will not spend money.”

According to Uppal, the Internet has to get more reach. It has to get into audio and video. As an example of reach, she gave the example of the Yahoo front page, which reaches more people in India than the Hindustan Times and a little less than The Times of India. Yet, the fixed page cost for Yahoo is about 30 per cent of what the newspaper charges. That has to change.

Abhijit Pawar of Sakal said that even though his group is now into all media, he felt, “There is a legacy, a habit and a perception. Talking about the new media, no new people are coming into advertising. Even the ‘raddiwala’ differentiates between English and regional newspapers while buying them. Infrastructure has changed that and you can reach larger audiences. You cannot compare urban and rural purchasing powers.”

Shoring up the debate from a client’s viewpoint was Hemant Malik of ITC Foods. He started off in a lighter vein and said, “My glucose biscuit prices have not been raised for the last seven years – what are we talking about rates?” According to Malik, companies have to decide on objectives. “About 50-60 per cent of my ad budget is spent outside mass media. Today, there are so many media vehicles that it is a challenge to decide what will work for you. I will spend money where I have to. If I get it cheap, I will buy it cheap. All of us want the best deals, but that doesn’t mean that we will be paying for the worst. I may get a cheap but great deal through negotiation.”

Katial said he believed that large agencies do not know how to buy radio. In fact, small and medium enterprises (SMEs) spend more money on radio. Radio is giving away freebies to advertisers in spite of its potential to reach out to a larger audience.

Joshi said, “There is a notion that TV makes money through advertising. But everyone ignores the subscription money. If advertising revenue is Rs 1.5 billion, then subscription money is about Rs 3.5 billion – only we broadcasters get very little share of it.”

Pearl Uppal said, “The Internet has leveraged SMEs. People believe that it is measurable, that is why it has moved. I do not believe that. Advertisers are keen on spending, but they are paying when conversion happens.”