HLL, Star resolve their differences over advertising rates

Televisionpoint.com Correspondent
Hindustan Lever Ltd (HLL), India's largest advertiser and Star India have resolved their differences over advertising rates, and have entered into a new deal.

Star India was stood to lose Rs 100 crore following the decision of HLL to pull its advertising off the Star network. HLL was pushing for renegotiated ad rates with the Star network following the rollout of the conditional access system in Kolkata, Mumbai and Delhi from January this year, citing a drop in viewer ship ratings.

According to estimates, HLL currently spends about Rs 400 crore on television advertising annually, and the FMCG major spends close to Rs 100 crore on Star. HLL was believed to be demanding a 35 per cent discount on the existing ad rates, while Star was not budging beyond 25 per cent, and now a median figure of 30 per cent discount is reached between the two.

According to media buyers, one of the main reasons why advertisers are demanding discounted ad rates is the drop in channel viewer ship after CAS was made mandatory, and a shift in the viewers loyalty to competitor channels. Star India has witnessed 1-1.5 per cent dip in the overall viewer ship post the CAS rollout.

About 60-65 per cent of a channel's total advertising comes from the fast moving consumer goods companies, while newer businesses such as telecom, travel and tourism, insurance and mutual funds contribute a third of it.

Meanwhile, the industry experts are trying to move away from a cost per rating point (CPRP) system to a cost per thousand (CPT) system. This would link ad rates with the actual household reach of the channel as opposed to how the show fares in terms of ratings.