Hindustan Unilever boycotts STAR over ad rates

P&G had also opted out, but has now resumed advertising after a settlement with the broadcaster

In an escalating battle over rates, fast moving consumer goods giant Hindustan Unilever Ltd (HUL) has pulled out of advertising on the STAR network of channels. While negotiations are on, the country’s largest advertiser has stopped buying air time on STAR channels for over a month now.

HUL’s arch rival, Procter & Gamble (P&G), had also opted out of advertising on the network, but has now come to a settlement on the contentious issue of advertising rates. P&G has been off Sony Entertainment Television (SET), the third-largest general entertainment channel after STAR Plus and Colors, too, for eight months now, and there are no signs of it returning to advertise on that channel anytime soon.

Rohit Gupta, president of Multi Screen Media, which controls the SET channel, said: “Negotiations are on with P&G and once the right deal is struck, they would be on SET.”

On the company’s association with STAR, on the other hand, a P&G spokesperson said: “The STAR network continues to be our valued partner and part of our media plans.”

About HUL stopping advertising on STAR, people in the know said this was not the first time it had done so. In the past, there have been at least two instances when STAR and HUL have not seen eye to eye.

Sources in the know, who manage the advertising budgets on behalf of advertisers, said broadcasters like STAR demanded unreasonably high rates. “We are not trying to be too hard here. But the fact remains that the rates are just too high,” said a media industry executive who works on the HUL account. He declined to be named, due to the sensitivity of the issue.

On their part, broadcasters said advertisers drove a hard bargain and looked for large volume discounts. Media planners said discounts could be 30-40 per cent lower than rack rates — a fact broadcasters have resisted.

A top STAR India executive confirmed they were having issues with HUL, but declined to specify details. An official query sent to STAR did not elicit any response. HUL said it would not like to comment.

HUL’s yearly advertising & marketing budget was estimated to be close to Rs 2,000 crore annually, of which nearly Rs 700 crore was spent on Hindi general entertainment channels (GEC), said media planners. They also said bulk of this money went to STAR Plus alone, owing to its leadership in the Hindi GEC space. As a genre, Hindi GEC commands nearly 30 per cent viewership among all genres, putting it on top of the list in terms of most-watched genres.

P&G’s spend on Hindi GEC is said to be Rs 250 crore a year. Typically, ad rates on Hindi GEC channels during shows with television viewership ratings of two or three are Rs 80,000 to Rs 1 lakh for 10 seconds. Shows clocking TVRs of four-five get double the amount. FMCG firms, especially the big ones, want a significant discount, given the inventory they bring to the table.