• Since the advertising agencies are liable to pay for the media they release, regardless of whether their government clients have paid them or not, they find themselves in a fix, because if they fail to settle their media dues within the credit period, they are suspended by the PBA and APNS and cannot release media for any client.
• Government advertising spends are set to increase across media platforms. As agency margins continue to shrink in the private sector, not to mention the government’s extension into new avenues of digital and PR, agencies working with the government foresee the competition intensifying in the future.

The Ministry of Information, Broadcasting and National Heritage is responsible for devising the policies that oversee the development and release of Government (Federal and Provincial) advertising in Pakistan. Under the umbrella of the Ministry, the Press Information Department (PID) is responsible for ensuring that the legal framework regulating Government advertising is followed. It also acts as the focal point of contact and collaboration between the stakeholders involved and as the clearing house for both federal and provincial Government advertising.

The key stakeholders

Government advertising consists of classified and display advertisements. Restricted to the print media, classified advertisements include tender notices, vacancy announcements and Request for Proposals (RFPs) from vendors. As their budgets are preapproved by the relevant ministries, the media release and payment settlement process involved is simple. The situation becomes tricky when display advertisements are involved. The process is initiated by the ministry that wants to release a campaign after obtaining the approval of the Secretary of Information. Subsequently, agencies – only those accredited by the All Pakistan Newspapers Society (APNS) and the Pakistan Broadcasters Association (PBA) – are invited to pitch.

Since the advertising agencies are liable to pay for the media they release, regardless of whether their government clients have paid them or not, they find themselves in a fix, because if they fail to settle their media dues within the credit period, they are suspended by the PBA and APNS and cannot release media for any client.

Once an agency is appointed, the campaign is created, approved by the concerned Director General Public Relations and the client ministry and submitted to PID. Once the media plan has been approved by PID, a Department Release Order (DRO) is issued to the agency, which is now authorised to submit the Release Order (RO) to the releasing publications. Once the advertisements are printed, the publications generate an invoice which is sent to the advertising agency for submission along with their own invoice to PID for payment. However, the process is not as straightforward as it appears, because the authority for sanctioning payments is centralised with PID. In fact, it is the Press Information Officer (PIO) who must confirm that client ministries can release payments to agencies.

The media face-off

Given that in FY 2015-16, the Government of Pakistan was the fourth largest advertiser in the print media in terms of product categories (source: Aurora Fact File November-December 2016), the importance of the government as a client for newspapers cannot be overestimated. Traditionally, governments advertised heavily in the print media. A major reason is that tender advertising must be published in print and they constitute a considerable chunk of the total Government advertising. However, since the late nineties, the share of Government advertising in print has reduced. According to APNS, the TV-print break-up used to be about 50-50; in recent years, print’s share has gone down to 25-30%. There have been ongoing negotiations between APNS and the government to rectify this situation; the APNS is asking that the government increase the share of the pie by fixing its advertising spend at two percent of the cumulative development budget and that the budget allocation between media should follow a 50-40-10 proportion for electronic, print and digital respectively, as is the norm in countries such as India. Another bone of contention is the gap between the print tariffs offered to private clients compared to those offered to government clients. According to APNS, TV not only receives a larger share of government advertising, the rates offered by the channels to the government are higher than those offered to their private clients. The PBA, however, disagree, contending that all government spots get a flat 30% discount on the printed tariff of any channel and whenever a channel revises its tariff, it automatically affects the government rates as well. They further point out that unlike print, PEMRA regulations state that TV and radio are legally bound to give 10% of their airtime free of cost to government public service campaigns.

Agencies in a fix

Although TV and print continue to disagree on this score, they share a common ground when it comes to the recovery of government dues. The issue is that although the credit period allowed by the PBA and APNS to agencies to make payments to channels and publications ranges between 60 to 90 days, the reality is that it can take between four to 12 months for government payments to come through. Since the advertising agencies are liable to pay for the media they release, regardless of whether their government clients have paid them or not, they find themselves in a fix, because if they fail to settle their media dues within the credit period, they are suspended by the PBA and APNS and cannot release media for any client, whether private or public, until they pay up. On the issue of delayed payments, the PID’s response is that there are delays from the agencies, which despite being sent reminders, fail to submit the paperwork for bill processing.

Government advertising spends are set to increase across media platforms. As agency margins continue to shrink in the private sector, not to mention the government’s extension into new avenues of digital and PR, agencies working with the government foresee the competition intensifying in the future.

Another issue is the creative (or the lack thereof) aspect of public sector campaigns. One of the primary reasons for this is that government clients expect agencies to put together campaigns in a matter of hours or days at best. “Delayed payments; stringent delivery deadlines; abysmal working hours and collaborating with people who have no idea of what advertising is.” These were the four most commonly cited grievances of having the government as a client. This begs the question that if working with the government is such a thankless endeavour, then why not limit agency business to the private sector? The response was refreshingly honest and unanimous, and best summed up by Sohail Kisat, Group Chairman, MCOM: “Government is the only client that allows the agency to retain a 15% commission on media placement and that is where the real money is. In the private sector, the margins are as low as two to three percent, which is why we see agencies pitching for the so-called ‘dreadful government campaigns.”’

Government advertising spends are set to increase across media platforms. As agency margins continue to shrink in the private sector, not to mention the government’s extension into new avenues of digital and PR, agencies working with the government foresee the competition intensifying in the future. Despite the manifold challenges of working with the government, no media platform or agency wants to miss out on receiving a share of the government’s considerable ad spend.

Article excerpted from ‘The Government as the Nation’s Advertiser’, published in the March-April 2017 edition of Aurora. (https://aurora.dawn.com/news/1141941).

Ayesha Shaikh is a leading advertising and communications expert at Aurora. aurora@dawn.com

First published in THE DAWN OF ADVERTISING IN PAKISTAN (1947-2017), a Special Report published by DAWN on March 31, 2018.