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No beating about the bush.
WPP has hit back at NDTV’s allegation that TAM ratings are flawed with a cleverly planned counter-attack. Will it now be a battle of wits, strategy and dirty tricks?
After two weeks of silence, the mighty WPP Group has hit back hard at New Delhi Television (NDTV) for its $1.3billion lawsuit against incorrect TAM (Television Audience Measurement) ratings, with chairman Sir Martin Sorrel leading from the front. The crux of NDTV’s lawsuit is the allegation that TAM ratings (controlled by WPP), which are the main basis of deciding advertising spend in India today, can be influenced for a price.
WPP’s statements show that it is no longer a battle about the quality of TAM ratings but a battle of wits and strategy between WPP and NDTV.
The $16 billion WPP group, founded by Sir Martin Sorrel, who is also its CEO, is the largest communication services group in the world with unparalleled reach and access around the world, across all communications segments and sub-segments. India, until recently a fast growing economy, is important to WPP as is evident from Sir Martin’s frequent visits to the country.
NDTV is the David to WPP’s Goliath. It is a glamorous-looking company, whose clout has waned steadily over the years due to editorial controversies, tough competition, increasing media fragmentation, poor finances and miserable share price performance. Yet, its clout is completely disproportionate to its financial muscle (or lack of it) due to powerful political connections, mainly with the ruling Congress-led government and some leaders of the opposition (mainly the Left).
This clout was on display soon after NDTV filed the lawsuit. Media houses, which had refused to join the suit (NDTV sources say they had approached most of them to join hands), unleashed a spate of media reports supporting NDTV’s viewpoint. They were worried that the information & broadcasting ministry would support a move to threaten the market dominance (a monopoly) of TAM ratings.
Through all this, the WPP group remained silent. Those of us who asked Nielsen (India and overseas) for a reaction, were directed to TAM India, which sent this one-liner on 31st July. “TAM India, a 50:50 joint venture between Kantar Media and Nielsen doesn’t comment on any litigation.”
So what has changed a month later? Clearly, WPP had studied NDTV’s lawsuit and decided on a strategy of planned aggression led by Sir Martin himself. And it has really hit hard starting with a press statement timed to hit the global media first, which dismissed NDTV’s action as a “hypothetical lawsuit” that had not even been properly served (although it is posted on the New York Supreme Court website). Secondly, although NDTV’s lawsuit documents admission by Nielsen’s global executives about the TAM’s poor quality, the group aggressively defended the quality of its ratings.
Further, in an interview with Mint on 25th August, Sir Martin savaged NDTV, saying a “two-lawyer firm, ‘which’ specializes in restaurant law” had called WPP and “asked if we would discuss a settlement. I said there is no question of settlement. This whole thing is mischievous, designed to elicit some financial response from us”. He also told Mint that “they (NDTV) are issuing illegitimate proceedings in the US with lawyers working on a contingency basis, where they do not get a fee, but a percentage of the settlement. That is why they rang up”. Expectedly (to us) Sir Martin attacked NDTV’s financial performance by pointing out that its “market cap has fallen from $800 million to $60 million”. He ended by saying that NDTV’s PR campaign had hurt the reputation of WPP and TAM and that is why WPP was considering a defamation suit.
Based on my conversations with NDTV sources, it seems safe to say that they have been blind-sided by Sir Martin’s aggressive posturing. There is some talk about NDTV’s lawyers, suing Sir Martin in New York for defamation. But what happens next in India? NDTV has responded to the ‘hypothetical’ charge by providing details of an acknowledgement by Kantar Media Research about being served, and WPP has since modified its stance to claim it wasn’t “properly served” a notice of the lawsuit.
It will be interesting to watch. Soon after NDTV filed its suit, a spate of broadcasters came out in support of its charges of corruption and low sample size. Some, like the Zee Group claimed that they too had complained about the tiny sample size and ability to influence the ratings. The media and broadcasters associations were uniformly supportive. The News Broadcasters Association, the apex body of news broadcasters in the country, quickly wrote to the I&B ministry about TAM Media’s TV viewership measurement. The ministry in turn indicated that it would hasten the setting up of the Broadcast Audience Research Council). WPP calls this sudden aggression a “trial by media”.
But nobody probably reckoned that WPP would hit back so hard or take three weeks to do so. Will broadcasters continue to back NDTV? Let’s remember that financially, most broadcasters are as badly off as NDTV. Many remain alive only because of politicians (with an endless supply of funds) who back them, look upon television as a tool to reach their constituents. With WPP controlling the biggest media buying agencies in India, we believe that the media will happily do an about turn. After all, in a situation where most of mainstream media has no qualms about private treaties and paid news deals, why would it want to bite the hand (WPP) that feeds it?
As expected, WPP’s aggressive stand and statement released to the global media lays the ground for challenging NDTV on the jurisdiction issue. Clearly, it does not want the allegations of corruption being heard in a New York court, which may take a more puritanical view of the matter. On the other hand, pushing the matter to an India court is guaranteed to ensure that it will drag for decades. Meanwhile, if TAM improves its rating system (it has already offered a six-point agenda to do so), the eventual verdict will have little meaning.
Until the hearings begin at the New York court, it will be an interesting battle of strategy and maybe even dirty tricks—after all, there is a lot riding on the jurisdiction issue and while courts are not supposed to take cognizance of media reports, everybody knows that it does play a significant role. Our guess is that NDTV failed to realize how well the WPP clout and PR machinery would work on its home territory.
Toyota Kirloskar said here is no stability of diesel pricing policy in India and a company like us cannot keep on changing strategy
New Delhi: Toyota Kirloskar Motor's (TKM) plan to set up a diesel engine plant is held up as it is unable to convince its Japanese parent because of the lack of clarity in pricing policy of the fuel in India, reports PTI.
"If you look at the market dynamics in India there is an increase in the demand for diesel. We have been conducting a feasibility study on diesel engine manufacturing in India but are unable to convince our headquarter," TKM deputy managing director (Marketing) Sandeep Singh told reporters.
"There is no stability of diesel pricing policy and a company like us cannot keep on changing strategy...it is about going and asking for changing of plan and ask for investment in a new technology," he added.
In April, TKM is understood to have put forward a proposal to set up the plant in India after the Budget for 2012-13 spared diesel vehicles from additional taxes.
There has been demand to increase taxes of diesel passenger vehicles from different quarters to prevent usage of the subsidised fuel for "luxury". However, the automobile industry has been asking the government to deregulate diesel price in line with petrol.
When asked how long will the company take to decide on setting of the diesel engine plant, Singh said: "We cannot give a timeline...the feasibility study is still going on."
He said the company has started petrol engine production from its Bangalore plant, which has a total capacity of one lakh units annually.
The plant has been set up at an investment of Rs500 crore. In the first year the company is looking at producing about 30,000 to 35,000 units of engines depending on market demand.
"At present 22 per cent of the total monthly sales of about 7,000 units of Etios and Liva, is petrol and the rest diesel."
Asked about launching of Toyota's luxury brand Lexus in India, Singh said: "There is an apprehension about the increase in customs duty...we are still studying the market and we hope to get a clear direction by the end of this year."
The company had earlier said it would bring the brand in India by 2013 and planned to set up exclusive Lexus showrooms to sell cars and sports utility vehicles of the brand.
Toyota Motor is also planning to launch eight new products, including Etios, in the mid-term.
"We will launch eight new products in the emerging markets and India will be a prominent one. The products will be introduced in the next 6-8 years," Toyota Motor Asia Pacific Executive Vice President Vince Socco said without disclosing details.
The MoU between ONGC and Mitsui is expected to pave the way for setting up a re-gasification terminal in India including the marketing of re-gasified LNG