A Dummy's Guide to Advertiser Funded Programme

How the business of AFP works in India and what a deal entails for the brand and the channel.

Asian Paints has recently launched an Advertiser Funded Programme (AFP) on Colors; so has Cadbury India with Bournvita Quiz Contest. MTV, too, is currently running the international AFP, Coke Studio@MTV.

The concept of AFP is nothing new in the country and traces its origin back to the 1950s in India. While there have been many examples of AFPs in India, there is a thin line of differentiation between an AFP and a presenting sponsorship title. This guide is for people who want to understand how the businesses of AFPs work in India and what kind of deals happen between the channel and the brand.

Q. What is an AFP?

Advertiser Funded Programme, as the name suggests, is a programme that is funded by the advertiser. It is done together by an advertiser and a broadcaster. While it gives a customised solution to a brand, it gives entertaining content to a broadcaster.

The content is related to a particular brand and the story is woven around that brand. AFPs are generally customised properties/content for clients, which are in sync with their brand proposition. It is a mean by which an advertiser wants to connect with the target group, without using traditional advertising.

Q. How is an AFP different from the presenting sponsor of a show?

Unlike presenting sponsorship, AFP is not an association that happens after the programme is conceived, packaged and is ready to be sold. The involvement of the brand in case of AFPs begins before any blue-print of the show exists. The name of the brand is embedded into the name of the show in case of an AFP (for example-Coke Studio). When a brand is sponsoring a show, it is buying audiences' reach, GRPs and may or may not like the content. The sponsorship pitches begin after the concept is ready and in many cases, after the pilot of the show is run. The content in AFP is pumped around the brand and its features, and the promise it wants to communicate.

Q. How old is the concept in India and abroad?

While abroad the concept was conceived around the 1930s, in India AFPs were seen in 1950s. In the US, the content on television and radio was funded by big players like Proctor & Gamble and Colgate- Palmolive. It is interesting to note here that the term 'Soap Operas' originated because the dramas were funded by FMCG players like P&G who would associate the name of their soap brand to a show.

In India, two of the early AFPs were Binaca-Geetmala (radio) and Bournvita Quiz Contest (on-ground).

Q. Can you give some examples of popular shows, both in India and overseas?

Overseas, there have been popular AFPs like Coke Studio, Guinness World Record (known until 2000 as The Guinness Book of Records) and Gillette Cavalcade of Sports.

In India, the popular AFPs are Hero (earlier, Hero Honda) Roadies (MTV), Bournvita Quiz Contest (Zee TV, Sony, Colors), LG-Mallika-e-Kitchen (Colors), Panasonic Aapka Sapna Hamara Apna (Zee TV), Tresemme - A Cut Above (Zoom), Dell Inspiron Road Diaries (Bindass) .

Q. How does the idea of an AFP come about?

There are two types of AFPs. One is 'In and out' wherein the broadcaster comes with a concept after knowing a brand's need and pitches it to the brand. The other way is when a client comes up with an idea and approaches a channel which can execute it and give the brand the target it needs. Most broadcasters have dedicated teams for branded solutions.

Q. Who owns the IP of such a programme?

While it's mostly the advertiser that owns the IP of such content, at times even the channel can own it. It depends on the deal. If both the idea and execution is by the channel and the advertiser is only giving money to produce it, the channel might hold on to the IP of the show.

Q. Who's risk is it - the channel's or the advertiser's?

The risk is both of the channel and the advertiser. While the advertiser's money is at stake, the channel's viewership is at risk. If the show doesn't work, the advertiser will lose money and the channel will suffer in terms of numbers and ratings. Channels like those in the Hindi GEC genre rarely want to compromise with their GRPs for some extra money. Also, in some cases, the deal is structured such that the advertiser doesn't pay 100 per cent money for the production of the show. It holds back some amount which is given to the channel only if the programme delivers a certain pre-decided viewership. In such cases, the channel puts in money which isn't refunded if the show doesn't do well.

There are also deals, though rare, wherein majority of the investment is done by the advertiser but the channel also contributes money, hence the advertiser doesn't bear 100 per cent cost of production of the AFP.

Q. Is advertising by other brands accepted on AFPs?

Yes. The advertiser can buy a slot, consume some FCT and ask the channel to sell the left over inventories to other brands. When a big player, like an FMCG brand, does an AFP on a channel to promote a brand, it may consume all the FCT to promote its range of brands. The channels can accept advertising of other brands on the show as well. It depends on how much inventory is being consumed by the main advertiser.

Q. Are their AFPs in media other than television?

Yes, AFPs are customised properties/content that one creates for its client. It is giving the client brand solution and can be on-ground, radio, mall activation, college event or television. For example, Channel did a Tata Nano Student of the Year contest wherein the contest winner, the smartest kid, was crowned as the 'Student of the Year'. On radio, there have been shows like 'From Russia with love' on 104 Fever FM in 2010 that was funded by the Russian Embassy and Binaca-Geetmala that was aired on Radio Ceylon from 1952 to 1988. Binaca-Geetmala then shifted to Vividh Bharati service of All India Radio in 1989, where it ran till 1994.

Q. Who - advertiser or channel - is responsible for promoting an AFP?

It depends on how the deal is structured and the scale of the show. The broadcaster mainly promotes such shows on its network channels. The advertiser can also promote the property in its own ways.

Q. Why aren't AFPs very successful in India? Why are they more popular on niche or specialised channels and not Hindi GECs?

Cost of doing an AFP is far more on a Hindi GEC than on any other channel like music and youth entertainment. In an AFP, the client is overtly expecting branding and lots of creative elements are overlooked while creating AFPs in certain cases. The GECs are far more conscious about their GRPs and their daily soaps are their bread and butter. When a brand is doing an AFP on any Hindi GEC, it is given a non-primetime slot and that doesn't usually work well in terms of viewership. And, despite low viewership, it costs a bomb to the brands. Hence, they refrain from doing AFPs on Hindi GECs.

There have been very few successful AFPs in India. Sometimes, one-off properties like Hero Roadies go on to become a tent-pole property for the channel and a full-fledged show.

Many a time, the objective also gets diluted. On one hand there is a client that wants maximum visibility, while on the other hand there is a channel that wants to maximise its entertainment quotient. The two may not always converge and the programme becomes an advertorial.

In terms of promotion, the channels don't promote AFPs as heavily as they promote their own properties and hence they don't get traction; the RoI isn't sufficient. AFPs are more about the long term gain that a brand gets and not about immediate RoI.

Q. What are the big issues or prerequisites to consider before deciding to launch an AFP?

AFPs are created if there is something that a brand wants to say and it cannot be done in 30 seconds. There should be a defined task of how an AFP is being done. It usually helps the brand build certain equity and a story.

Q. Are there brands from particular categories that are more likely to have AFPs?

Not really. Any brand can do an AFP but it should make sure it cracks the right concept, because it is spending a huge amount to launch it. Retail, infrastructure, insurance and automobile categories have had AFPs on news channels. As mentioned earlier, if a brand wants to tell a story which cannot be told in 30 seconds, it opts for AFPs. Paint brands do AFPs so that they can take their viewers closer to the look and virtual feel of the house painted in their brand.

Additional Interviews Nikhil Gandhi (executive director, Youth Channels - Media Networks Disney UTV), Pawan Jailkhani (chief revenue officer of 9X Media), Prem Kamath (GM and head of Channel and GM of Star Pravah, Paritosh Joshi (consultant), Shekhar Banerjee (‎Senior VP and head of Pinnacle), Suresh Shah (VP investment, Allied Media), Vaibhav Modi (CEO, Bolt Media), Nikhil Rangnekar (‎jt. CEO at Spatial Access Media Solution), Anooj Kapoor (business head of SAB TV).