Pitch Against Discounts Will It Work?

A deep dive into the scenario of IBF, INS objecting to media agencies giving advertisers discounts on behalf of publishers and broadcasters

- Dipali Banka

As Kerala tries to battle the fury of the floods, an upheaval of sorts has shaken up the media and advertising domain too. The issue of discounts being offered by media agencies to advertisers during pitches in order to bring down rates and win the business has been taken up by the Indian Broadcasting Foundation (IBF). Last week, in a first-of-its-kind step, IBF Director Punit Goenka sent out an e-mail (see box on right) to all agency heads asking them to abstain from the practice of offering discounts to advertisers on behalf of broadcasters without prior approval from them. The Indian Newspaper Society (INS) too has been talking about the same issue in the Print domain for a long time now.

WHY HAS THE ISSUE CROPPED UP NOW?

The issue has been brewing in media circles for a very long time but there are three reasons why it has come up now:

Increasing number of media pitches with pricing and cost-cutting as the driving factor

Media companies have finally started feeling the pinch of loss of revenue and spiralling media costs

Media agencies themselves face revenue loss as they have to lower rates in order to retain or win business

Giving discounts to clients is not unfair, but giving it without the consent of the media owner and not leaving any room for negotiation is the issue which is being addressed by this letter sent out by IBF. The INS has reportedly taken up this issue with the Advertising Agencies Association of India (AAAI) and would soon be taking it up with each agency one on one.

SO WHO’S BREAKING THE PRICE?