Advertisers back on TV with rise in FCT & discounts galore

Advertisements are back on television after a dry spell, courtesy the lockdown. Free Commercial Time (FCT) and ad revenues are finally looking up. Broadcasters are getting more ad queries but they are also offering discounted rates to long-term investors to help them tide over difficult times. But are the discounts here to stay? Perhaps yes. At least till the festive season, say people in the know.

Ad rates have been slashed by 35 to 50% even for genres that have performed well during the lockdown, industry experts said. To keep up with the rise in ad volume, broadcasters are giving in to advertisers’ demands for discounts, which are expected to continue through the second quarter as well. 

According to media planners, while local TV channels charge anywhere between Rs 1 lakh and 10 lakh for a 30-second commercial, for national broadcasters the rates go up to crores. “While the market average for discounts is close to 50%, in a bid to beat competition some broadcasters have offered discounts as high as 60-70%,” said a North India-based media planner. 

The quantum of FCT, which had hit rock bottom, is now looking up. “For a 30-minute show, FCT had gone down to 5 minutes. Thanks to the improving market situations backed by discounted ad rates, FCT for the same shows are showing 50% growth. Channels are again pitching for 10 minutes of ad slots,” said another media planner on conditions of anonymity. “The trick is to get the advertisers back. Once the demand supply chain is stabilised, ad rates will also follow suit but it will take time,” he added. 

Explaining the ad discount scenario, Ashish Sehgal, Chief Growth Officer – Ad Revenue, ZEEL, said: “Brands have realised that it’s imperative to be in the mind map of the consumer under the current circumstances wherein consumerism is on the uptick. This has given rise to demand surpassing supply at our end. In such a scenario, though advertisers are expecting better price points, even if we want to, we are not in a position to operate at discounted rates. Having said that, clients who are ready to invest with us on a long term are at an advantage.”

On the current scenario where ad rates have been kept dynamic, Pawan Jailkhani, Chief Revenue Officer, 9X Media, said, “Brands are asking for discounts and a lot of broadcasters are extending it. It’s unfortunate because viewership has been at an all-time high. We should ideally look at working out feasible solutions for clients or for brands and agencies rather than giving away steep discounts."

According to Jailkhani, even while the economy is trying its best to regain normalcy advertisers have not stopped asking for discounts although lockdown conditions have been eased. “It’s sad that broadcasters have to oblige given the distress in the industry.”  

“For the first three months, we gave huge discounts, to make clients spend, and clients also obliged despite there being no supply chain. But as of now, the production and supply chain, distribution and availability of stocks are all back to near normal but there is little hope of going back to the initial ad rates. As an industry, we have all collaborated well in the past and even during these tough times we should work together to support and ensure that our industry should not go five years back due to rate benchmarking,” Jailkhani noted.

Some broadcasters said that the increasing viewership is expected to bring in some respite in the coming days and it is the only hope for the industry that is heavily dependent on advertisements for maintaining a constructive topline.