Business Today

Tying up the airwaves

The competition, clutter and the fragmented media environment are forcing advertisers and television broadcasters to enter into multi-year contracts with each other to assure a regular flow of ad revenues and, in turn, offer advertisers assured spots on television.

     Print Edition: January 27, 2008

The competition, clutter and the fragmented media environment are forcing advertisers and television broadcasters to enter into multi-year contracts with each other to assure a regular flow of ad revenues and, in turn, offer advertisers assured spots on television.

The trend started with Kingfisher partnering NDTV Good Times for five years. The deal is believed to be worth Rs 100 crore. Thereafter, INX Media signed a three-year advertising deal with Hindustan Unilever (HUL), one of the biggest advertisers in the country, for 9X, its Hindi general entertainment channel. Then, three Club INX Platinum members, Reliance Industries (Vimal), Future Group and Vodafone, have also signed up with INX Media for three-year advertising deals at Rs 35-40 crore each. Club INX, which also has Gold and Silver category memberships, provides crystal clear deals to its clients and is designed to make the media house the preferred media network for advertisers.

Says Ravi Kiran, CEO, South Asia, Starcom Mediavest: “This trend was visible to us in 2004 itself. But it has come into play in a big way only now. The reason for this is increased competition in the Indian television space.” Uday Shankar, CEO, STAR India, adds: “Our long-term partnership with Airtel is an innovative approach to engage the advertising and media planning community beyond simple media buying.”

 So, what’s in it for an advertiser? Gopal Vittal, Director (Marketing & Communications), Bharti Airtel, says: “It’s a fabulous partnership and gives us good value for the money spent.” Such a partnership, he adds, protects Airtel from sudden spikes in rates, and secondly, “gives us an opportunity to shape specific properties (programmes) together”.]

For most channels and advertisers, it is about building a mutually beneficial relationship. Are there risks involved? No, say the stakeholders unanimously, as there is no money paid upfront.

Media watchers say that threeto-four years ago, large media networks were not in favour of such deals, but today, they cannot ignore them. Internationally, this is a big phenomenon. In the US and the UK, advertisers enter into multiyear and multi-platform deals with media networks. It’s just a matter of time before this becomes the order of the day in India.

Anusha Subramanian

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