Ad-spot rates of entertainment channels back to 2005-06 levels

A curb on advertising budgets for television by the large companies and economic slowdown have managed to bring down the prime-time (8 pm-11 pm) ad-spot rates of general entertainment channels (GECs) like Star Plus, Zee TV, Sony TV to the levels of 2005-06.

The prime-time ad-spots of leading GECs are generally considered expensive by media buying agencies as they attract the maximum viewership among the 80 million cable homes. Till some months back, the average effective ad-spot rates for the prime time band was Rs 1.25-Rs 1.6 lakh. Now it is down to Rs 80,000-Rs 1.25 lakh, media agency sources said.

Effective ad-rates refer to rates negotiated by the media agencies with the GECs on behalf of the advertisers as opposed to the fixed ad-rates given by the broadcasters that are much higher.

This happened as most big television spending categories like automobiles, banking, insurance, consumer durables, among others, are either not spending their ad-budgets on entertainment channels or have adopted a wait-and-watch policy, said media agency experts.

"There is a lot of unsold inventory of advertising spots of some of the entertainment channels. These spots are now being negotiated for lower rates," said Chandradeep Mitra, president and head of Mudra Max, the specialised media buying arm of Mudra.

Industry sources said on a month-on-month basis December will witness about 15-20 per cent dip in advertising spends by companies on these GECs compared to November. This means that from about Rs 200 crore that is generated on an average on the GECs every month, only about Rs 160 crore will be generated in December. Media buyers expect this trend to continue for the next couple of months at least.

"I will call the current dip in ad-spot rates a rationalisation of advertising budgets of several companies. We are now looking at 2009 and events like the Indian Premier League, Champions League and other cricket fixtures rather than focussing on spending money on entertainment channels now," said Vivek Srivastava, joint MD, Innocean, the in-house advertising agency of leading automobile company Hyundai.

Tarun Nigam, executive director (north), Starcom India, said, "I will not blame the slowdown for any dip in ad-spot rates on entertainment channels. There is a cash-crunch in every sector and ad-spends follow certain marketing objectives of the companies. Ad-money follows the eyeballs generated by shows on the television. So as long as the programming mix of channels continue to get eyeballs, companies will spend."