New DAVP policy to benefit certified newspapers

On 10 June, the information and broadcasting ministry announced a new policy that seeks to make government advertising in newspapers more transparent and equitable. In its statement, the ministry said that the new policy would streamline the release of government ads and ensure different categories of newspapers and periodicals are treated fairly. The Directorate of Advertising and Visual Publicity (DAVP) is the nodal agency of the government for advertising on behalf of various ministries, departments, public sector units and other autonomous organizations which are funded by the government.

The policy has been welcomed, in part, by Big Media, the publishers of large (in terms of circulation) newspapers, because it proposes a new system for the allocation of government ads and allows them to change ad rates (for DAVP ads) once a year as against once in three years now. It incentivizes newspapers to get their circulation numbers verified by the Audit Bureau of Circulations (ABC) and the Registrar of Newspapers for India (RNI). The publishers of small and medium newspapers aren’t pleased with the policy though. Many of them are not members of ABC and cannot get their numbers certified by the auditing body.

The new system is based on six objective criteria with different points allotted to each. Among them, the maximum points have been allocated to the circulation figure certified by ABC/RNI. Separate marks have been allotted for subscription to the Employees’ Provident Fund Organisation and the number of pages printed. Subscription to wire services, owning the press (presses) where the paper is printed, and the annual subscription payment to the Press Council of India also carry individual weightage.

DAVP will release ads to newspapers based on their scorecards. Medium-sized newspapers scoring less than 45 marks will not qualify.

According to Bombay Samachar publisher Hormusji Cama, the marking system does not make sense. “What we subscribe to shouldn’t have anything to do with government ads,” he said.

Some publishers say the government has made the process unambiguous in order to root out chances of corruption in allocating its ad money. The points system will ensure that fly-by-night operators and fraudulent journals are kept out and only legitimate newspapers get advertising, they add.

Overall, English newspapers will receive 30% of the spend, Hindi 35% and regional language dailies, the remaining 35%.

Under the new policy, a newspaper needs certification by RNI/ABC if its circulation exceeds 45,000 copies per publishing day. For a newspaper with a circulation of up to 45,000 copies, a certificate from a cost or chartered accountant (CA), a statutory auditor certificate or ABC certification is required. In short, a CA’s certificate will only be valid for newspapers with circulations of up to 45,000 copies (currently this limit is 75,000). Beyond that, an ABC/RNI audit is a must for all publications.

Arunabh Das Sharma, outgoing president of Bennett, Coleman and Co. Ltd that publishes The Times of India and The Economic Times, said that earlier even some of the bigger newspapers used to get a CA’s certificate for DAVP ads. “Now the government has cleaned up the system. The bigger and better papers will benefit. The procedure has been made stringent,” he added.

In another change, the government will offer premiums over the DAVP rates for prominent placement of ads in the dailies. Earlier, there were no page premiums and placement was determined more by personal relationships. However, only the newspapers certified by ABC or RNI will earn these premiums. DAVP will pay a premium of 50% over its rates for colour and black and white ads for the front page, 30% premium for the back page, 20% premium for the third page and 10% premium for the fifth page.

According to Cama, this move will only help the big newspapers mop up more advertising. “Basically, the DAVP budgets are limited. And if they pay premiums to big newspapers, there will be no money left for medium and small newspapers,” he said.

To be sure, the policy has classified newspapers and magazines into three categories: Small (under 25,000 copies per publishing day), Medium (between 25,001 and 75,000 copies per publishing day) and Big (over 75,000 copies per publishing day).

Aligned with the broad social objectives of the government, the policy has relaxed the empanelment procedure for small and medium newspapers in regional languages or dialects, as well as for newspapers in the north-eastern states, Jammu and Kashmir, and Andaman and Nicobar Islands. The policy says that DAVP will make efforts to release more social messages and related ads that are not date-specific to periodicals.

One rule that irks newspaper publishers, however, is that state-owned firms will also now issue ads at DAVP rates, which are actually much lower than the commercial rates that the dailies charge. Executives at newspaper companies say state-owned firms are commercial entities and should buy ad space at commercial rates.

The government has also streamlined the procedure for quick and timely payments by the client ministries to DAVP. According to data from DAVP, till 29 February 2016 (for the year 2015-16), the government had spent ₹ 842.89 crore on publicity, out of which ₹ 402.79 crore was spent on print media, while ₹ 353.31 crore was spent on electronic media.

Although small and medium-sized newspapers are concerned about the changes, the new policy seems to be in line with the Modi government’s larger vision of cleaning up the system. The focus is clearly on tracking where the government’s advertising money goes.

Shuchi Bansal is Mint’s media, marketing and advertising editor. Ordinary Post will look at pressing issues related to all three. Or just fun stuff.