While the investigation into alleged price-fixing in India's advertising industry has created significant tension, there are also voices that have expressed support for the media agencies involved. Many of the fellow industry 'veterans' argue that the complexities of the media buying landscape and the rapidly changing nature of the market often make pricing practices more complicated than they might appear at first glance.
Some argue that the advertising and media buying industries operate in a highly specialised and competitive environment, where pricing is often influenced by factors such as audience reach, platform popularity, and market conditions. The idea of price-fixing might not always apply because the ad rates in question can be driven by larger industry trends and strategic business decisions rather than collusion.
One of the industry sources on the condition of anonymity said that in the context of media buying, large agencies typically negotiate on behalf of multiple clients.
"This requires collaboration between agencies and media platforms," the source added. The source pointed out that this kind of collaboration doesn’t always equate to price-fixing. "Agencies might share information on market rates and strategies in order to negotiate better deals for their clients, but this sharing doesn’t necessarily imply any form of illegal collusion."
And these practices are often part of the industry's effort to streamline the buying process and offer better value to advertisers.
One industry insider said that large advertisers themselves can play a significant role in shaping ad rates, often pushing for discounts. Many of these large advertisers work directly with media agencies to negotiate customized rates. "From this perspective, the pressure for agencies to deliver competitive rates and offer discounts could be seen more as a business strategy rather than an illegal act of collusion."
Some industry players have also cautioned that a heavy-handed approach to regulation might stifle innovation and hurt the industry in the long term but they have highlighted at the same time that transparency in pricing should be a priority.
Finally, some argue that rather than focusing on accusations of price-fixing, the focus should be on improving transparency and standardising pricing practices across the industry. This would ensure fairer competition without unnecessary punitive measures.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
