Policy hindrance to growth of the advertising sector

Kathmandu, October 29:

Lack of proper advertisement policy has encouraged unhealthy competition in the advertising sector. Experts say it’s time for implementation of a new policy to put an end to the unhealthy competition growing in the market.

According to Nirmal Raj Poudel, president of the Advertising Association of Nepal (AAN), a five-point agreement was signed between Media Society and AAN some three months ago and now it’s time to implement that. “After Tihar, we are going to implement a new policy for the advertisement sector and I hope it will be a great step towards putting an end to unhealthy competition,” he added.

“There are no rules and regulation for the advertisement sector. The script of an advertisement has to be passed by the Nepal Film Development Board (NFDB),” said Raj Kumar Bhattarai, vice-president of AAN.

According to Poudel, the censor policy for a 10-second to one-minute TV commercial is the same as it is for a two-and-a-half hours celluloid film. To pass the script, NFDB charges Rs 5,000 and only then we are allowed to shoot. “The prepared commercial has to be again passed by the Audio Visual Section at the Ministry of Information and Communications after paying Rs 5,500,” he said.

There has been controversy time and again between the media and advertising agencies. To clear misunderstandings, a five-point agreement was signed according to which, clients should clear the payment to agency within 45 days and the agencies should make payment to the media within 60 days. A blacklist of either clients or the agencies not making the payment will also be made. Both the agencies and the media should support in market exploration, and the client while changing agencies should clear the due amount and get a letter of no objection or a clearance letter, said Bhattarai.

According to Bhattarai, AAN is trying to implement the system since the month of Shrawan but still there remains some mechanism to be developed. After its completion, AAN will make announce its execution.

Due to lack of a proper system in the advertisement sector, unhealthy competition has grown. Poudel said, “On one hand, it’s nice to see the advertisement sector blooming, but on the other it has generated unhealthy competition in the market. The lack of a proper system is causing the advertising sector to crack.”

Talking about unhealthy trends, he said, “Here, in the market different strategies like granting heavy discounts is growing, and if this continues the creativity and facility of good service will collapse in no time.”

There are 113 advertising agencies registered under AAN and some more are in the process of getting registration.” Earlier, we had only 30-35 members, but now the number has increased. We have 113 members and the registration process is still going on. Now, we need to classify.”

According to Poudel, large numbers of advertisements are made in television, radio, print, hoardings and events. In print, a total of Rs 1 billion worth of advertisements is made while in television it’s Rs 6.5 million and on radio it is Rs 3 million. Indirect advertisements worth Rs 7.8 million are also made.

In comparison to last year, the advertising sector has achieved a growth of 20-25 per cent. Poudel added, “Advertisement is needed everywhere and it’s the only sector which has a transparent tax policy. I think, the sector which is a service provider can be uplifted to the

industry grade.”