Guest Article: Manoj Malkani: TRAI ruling - A curse and a boon

By Manoj Malkani , Concept Communications, Mumbai | In Digital | August 22, 2013
The on-ground realities of the ad cap regulation.

Much ink has been spent on the obvious drawbacks of the government's ruling that imposes restricted time for advertisements on the television medium - a reality we marketers and media men face as early as October this year. It's obvious that rates will go up; budgets will go hay-wire; small brands will struggle to achieve frequencies; creatives will be mauled into giving more 10 and 20-seconders...but there is another side to the story.

Manoj Malkani

A host of channels in various genres have been launched recently, quite a few of them news channels such as News Nation and India News. It's been a struggle for these channels to survive or find an even ground to fight the Big Daddies of television. The TRAI ruling should certainly bring a ray of hope for them. The fast approaching tug-of-war between advertisers, media agencies and media channels to get spots logged on could end in the corridors of these yet-to-be popular new channels.

My reasoning is simple - the industry is all about campaigns and seasons; it is very fluid and campaigns happen as per the requirements of the brands. If you monitor inventory in the months of June- July, it would be really low vis-à-vis the festive season. Though cyclical, it remains unpredictable. Every season has a different focus - there certainly is a science behind every burst, be it a brand campaign or a tactical one.

In the coming days, we are planning for the "offer season" campaigns. We will be talking of smaller ads but really huge numbers. Offer campaigns are tactical campaigns run on high frequency and smaller edits, so the probability of watching the commercial goes up.

The enforcement of the ruling will affect inventory. The channels will have lesser space to play around with inventory, creating a huge spot drop. This in turn will affect the advertiser's campaign performance. Because of shorter ad breaks and spot bumping, there will be a huge loss in GRP. The client will have to do with make-goods to ensure that the spots are run. This will result in missed opportunity.

To ensure adequate opportunity to see, the client will have to choose more channels or increase the campaign duration. While channel revenues will take a certain beating, it will also affect the brand and in turn hit client revenue, as the spend patterns will change due to space (un)availability and the new rates given by the channels (I am assuming here that the channels will have no option but to increase rates).

In today's scenario, where every rupee counts, media agencies will need to look at other avenues, though not outside television. To take the rupee a longer distance, they will need to spread across from the No. 1 channel to Nos. 6, 7 and so on to ensure that the campaign runs through its stipulated life cycle. During the festive season, the clutter level will be highest and channels will run only spots which have high value to increase the yield. This, in turn, will give a breath of fresh air to the smaller channels and create an opportunity for them to grow.

Take the case of government campaigns. Recently, we have seen a spurt of them, focusing on developmental programmes and schemes. Not one of these is less than 45-60-second duration, with high frequencies. Most of these are run on DAVP rates, which are much lower than the market rates. Assuming a campaign runs for 4-6 weeks, with a commercial of 45-second duration and at least two spots run per hour due to the restricted time bands which are "prime time" for the channel and most wanted by advertisers, on the clause of 10+2 inventory, what would it mean for the channel? Out of 12 minutes, 1.3 minutes gone for the government at DAVP rates!

Over time, this loss is bound to impact performance.

On the other hand, clients and agencies pay channels as per their performance - the higher the performance the higher the rate. With no increment in the performance, agency-client teams will certainly look at options to drive their budgets the furthest mile. This, in turn, will prove to be a boon for the newly launched channels, giving them an opportunity to survive.

For advertisers, too, this is a great opportunity. Longer ad breaks don't always ensure visibility, what they ensure is viewers surfing and straying to other channels. The shorter breaks are bound to have some impact on this habit, cut down the irritability quotient of the viewer towards ad breaks and improve stickiness with a channel/programme for a full duration.

Most GEC channels do follow this thumb rule even today, but as the consumer grows more restless and demanding, a strategic change in thinking was certainly needed to ensure a win-win situation for the advertiser- media agency- media channel- consumer.

The author is media head, Concept Communications.