http://www.business-standard.com/india/storypage.php?autono=330889
Alternative media to gain from high print ad rates Ruchita Saxena / Mumbai August 09, 2008, 5:37 IST Advertisers may spend more on alternate media after some media group including Bennett, Coleman & Co (BCCL) raised advertisement rates to offset higher input cost, advertisers and media planners say. Companies or advertisers would look for more cost-effective media such as radio or digital media if the growth in readership fails to keep pace with the increase in advertisement rates, Chandradeep Mitra, president of media planning firm Mudra Max, said. BCCL accounts for about 20 per cent of the Rs 17,500-crore advertising industry, according to industry sources. The increase in advertisement rates, in many cases across media segments, is also forcing companies to take a holistic view about their advertisement spends. Companies in sectors most affected by the economic slowdown such as auto, financial services and real estate have already cut down their ad spends by about 20 per cent compared with last year. Currently, the print media makes up for 45-48 per cent of the ad spends by companies. This share of the print media is likely to stagnate this year and alternative media share, such as radio which accounts for 3 per cent, may go up, say experts. Jnaneswar Sen, vice-president (marketing), Honda Siel Cars India, said, "The industry is already reeling under input cost pressure and this hike will put additional burden. We have to look at it holistically. We may relook at our ad spend, but whenever some new launches happen in the industry, expenses on advertising rise as part of the products' promotion campaign." Market sources say that BCCL has effected a 40 per cent ad rate hike in select categories such as corporate advertisements out of 70-80 different categories offered by it. However, the average effective ad rates across the board may not be more than 15 per cent. Other publications, including HT Media and Deccan Chronicle, have raised advertisement rates for print in the range of 5 per cent to 30 per cent, across various editions and categories. According to Bhaskar Das, executive president (response), the Times of India Group, "Tariff rationalisation is part of every industry, depending upon variables that influence the business processes. In any media business, there is a plethora of categories, depending on competitve position and market attractiveness. As a result, there is no uniform pricing policy across categories as there is no homogeneity." The ad rate increase may also force several companies to opt for regional media channel including diverting spends to regional print medium. G S Sodhi, general manager (marketing), Amul India, said, "For us, if the rates are not justified, language press provides a good option as they help us reach our target market at one-third or even half the cost." Punitha Armugham, CEO, Madison India, said, "Media has the prerogative to set prices and clients have the prerogative to choose. Any decision on increasing the ad rates is thought through by the company. In case any advertiser differs, they can also be negotiated."
