Broadcasters betting big on shows funded by advertisers

Advertiser-funded programmes seem to be doing better on niche channels than on general entertainment channels

As advertisers rue the fall of the 30-second TV commercial from its position of the most powerful piece of communication, marketers are betting big on a new concept: AFPs or advertiser-funded programmes. Such shows are high priority for companies like Hero, Max Bupa and DuPont that are grappling with the TV viewers' desire for control which has driven the popularity of digital video recorders and on-demand services that often permit ad skipping. The broadcast regulator's sudden move this May to enforce a 12-minute cap on ads per clock hour from October 2013-that restricted the ad inventory available to broadcasters and forced advertisers to explore new means of consumer engagement-seems to have added fuel to the fire.

Going by its traditional definition, AFP is a programme that is funded by the advertiser. It is conceptualised hand-in-hand by an advertiser and a broadcaster. While it gives a customised solution to a brand, it gives entertaining content to a broadcaster. Media planners say the channel/broadcaster still has an upper hand in the AFP equation. That is because the IP stays with the channel. While an advertiser makes an upfront investment of up to 40 per cent of the cost, the rest is provided by the channel. After this, the channel starts hunting for co-sponsors, advertisers interested in in-show placements etc.

Of course, AFPs trace their origin back to the 1950s in India with programmes such as Binaca-Geetmala. What is new is the fact that the initiative now comes from the brand/advertiser and not the broadcaster, with the contours of revenue share spelled out at the time a programme is conceptualised.

Do AFPs pay back the advertiser? Apparently, they do. After wrapping up the first season of Max Bupa Walk for Health, the advertiser saw its brand score and Facebook reach skyrocket to 30 per cent and 40 per cent respectively. However, Aditya Swamy, executive vice-president and business head of MTV, cautions against instant gratification. He says such properties take at least three to five years to give handsome returns. Sevantika Bhandari, director, marketing, Max Bupa Health Insurance, says, "We achieved way more than what we invested in terms of building awareness."

From the looks of it, AFPs are doing better on niche channels than on general entertainment channels (GECs). One reason could be that GECs air AFPs during non-prime time slots only. For AFPs, while top performing GECs during non-prime time slots can deliver TVRs between .5 and 1, niche channels can deliver TVRs of up to 2. Rohit Gupta, president of Multi Screen Media, which runs channels like Sony, Set Max and Sab, points out that quality is still an issue. He says, "A large number of AFPs are produced cheap. For smaller channels, more AFP properties mean more content. But for bigger channels, bad quality means bad returns."

Some broadcasters are eying their AFP business as a revenue stream with immense potential. Times Television Network, for instance, is currently running the first season of a programme called Power of Shunya for DuPont and Walk for Health for Max Bupa. Youth channel Bindass will soon launch an AFP for Colgate and is looking at AFPs as a means to create long-term properties. The channel is betting big on its AFP business which is expected to contribute 25 per cent of its revenue this year from 10 per cent last year.

Zee runs 15 slots per week for AFPs across network channels bringing 3 per cent revenue. Ashish Sehgal, chief sales officer, Zee, has been a firm believer of AFPs as a revenue stream. He says, "It helps us go beyond regular free commercial time and partner our clients in growing their business by forging a long term relationship."

Hero MTV Roadies, the most successful AFP in India delivers a TVR of upwards of 2.5. According to sources, Hero not only shares a large part of the show's cost but ups the budget year on year as the show gets bigger. On the other hand, Coke studio which runs on the same channel has fizzled out over the last three seasons and garners TVRs in the range of .3 and .4. One reason could be that the show caters to niche audiences with strong focus on folk and fusion.

Anwesh Bose, senior vice-president at DDB Mudramax, says when AFPs move beyond the stage of experimentation and more and more advertisers throw their hats in the ring, investments on such properties will go up. That said, advertisers investing in AFPs are not looking into show ratings only. If the first step is to find ways to communicate with consumers, the focus is shifting towards collaborating with broadcasters to create cross-platform properties.

Nikhil Gandhi, executive director, ad sales, media networks, Disney UTV, says AFPs have to be platform-agnostic. "Viewers watch content as and when possible on a medium/device of their choice. Now TV channel has become a stepping stone for AFPs that garner more eyeballs on social media platforms like YouTube and Facebook later," he adds. During the making of Nivea Kiss and Make Up, Disney UTV's Bindass, for instance, worked overtime to push the content on social media.