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IBF withdraws hike on ad rates

NEW DELHI: The day-and-a-half-long stalemate between broadcasters and advertisers over surcharge on advertisements ended on Wednesday with the Indian Broadcasting Foundation (IBF) withdrawing the 25 per cent hike on advertisement rates of all existing contracts.

With this, most channels were able to get back a bulk of their advertisement spots and the situation is expected to return to normal by Thursday morning. As for new contracts, IBF member Joy Chakraborthy said the Board of Directors would meet within a fortnight to decide whether to levy a surcharge on new contracts.

Besides the loss of revenue, the IBF decided to withdraw the surcharge as it had “no desire to jeopardise or sabotage the marketing plans of the advertiser community.” That the standoff coincided with the festive season — when the loss of revenue is more than during normal times as this is peak time for advertising — also worked in the advertisers’ favour as the IBF met to take stock of the situation in Mumbai.

According to an IBF statement, an Extraordinary General Meeting would be convened shortly to evolve a consensus on approaches to address the issue of “fair value for advertising inventory.”

“Heartened” that the standoff had brought the issue of fair value for television advertising out in public domain, the statement pointed to the frustration among broadcasters about the “unfairly low pricing imposed on their advertising inventory as a result of the indifferent attitude of and monopolistic consolidation tendencies among AAAI member agencies.”

Three-fourths of the advertising on television went off the air on Tuesday after the expiry of the IBF deadline of October 15 midnight by when advertisers had to sign up for the new tariff regime. Though the IBF had offered a month’s waiver to all those advertisers who came on board by the midnight of October 15, few signed up; resulting in a virtual black-out of advertisements on major networks all of Tuesday and early part of Wednesday.

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