CCI raids on agencies and aftermath: Game-changer for transparency in media buying?

The recent Competition Commission of India (CCI) raids on major media agencies have sent ripples across the advertising and marketing industry. Media buying, one of the most influential components of advertising, has often been under scrutiny for its pricing models, lack of transparency, and power dynamics among advertisers, agencies, and broadcasters. The raids have reignited debates on fair market practices, differential pricing, and the need for regulatory oversight.

After the media agencies, CCI has now turned its attention on industry bodies, scrutinising their guidelines to check whether they led to ad cartelisation.

As industry veterans dissect the situation, opinions remain divided – some see it as a necessary step towards transparency, while others argue that differential pricing is a standard business practice. The following in-depth analysis by Adgully explores the implications of the CCI’s actions, the structural challenges within media buying, and the potential evolution of the advertiser-agency-broadcaster ecosystem.

CCI Raids: A Regulatory Intervention or Disruptive Intrusion?

Marketing veteran Amit Gujral sees the CCI raids as a step towards increased transparency. “The CCI raids are a welcome watchdog mechanism for the media-buying business in India,” he states. Gujral argues that while broadcasters can command pricing premiums based on content quality and reach, agencies should not wield unchecked control over rates.

Vivek Srivastava, Founder, Integrated Brand Heuristics, remarks that, “Such investigations by government agencies can be triggered by multiple reasons – fact-finding, lack of understanding of business models, or acting on a complaint. Every industry faces such scrutiny at some point.” He emphasizes that not every regulatory action implies wrongdoing.

Anita Nayyar, industry veteran and ex-COO, Media & Communications, Patanjali Ayurved, believes the current situation was inevitable. “This had to happen at some point, given the polarization of business across a handful of top agencies.” She hints that the increasing market control by a few dominant players may have drawn regulatory attention.

Meanwhile, KV Sridhar, Global Chief Creative Officer, Nihilent & Founder, HyperCollective, presents a different viewpoint. He notes, “Differential pricing is nothing new. Buying in bulk always results in discounts, and 60% of media expenditure is done by the top 20 advertisers. Similarly, six broadcasters control 80% of the revenue, making it a concentrated market. Given this structure, some level of coordination is natural, but I don’t see anything unusual happening.”

The Larger Debate: Collusion or Business as Usual?

The CCI’s investigation has fueled debates on whether media agencies engage in collusion or if the observed pricing disparities are simply a function of market dynamics.

Gujral suggests that the current model is unsustainable. “The industry requires a standardized framework that ensures fair participation for both advertisers and broadcasters. Media agencies should be compensated based on strategic value rather than opaque pricing structures.”

Nayyar acknowledges that agencies operate on wafer-thin margins. “The expectation on service, rates, and delivery is extremely high, which leaves agencies with no choice but to explore alternate sources of revenue.”

Sridhar, however, dismisses allegations of collusion. “I don’t see clear evidence of market manipulation. There is no monopoly or duopoly – multiple parties are involved. This structure exists across media, including print, television, OTT, and digital.”

An industry insider, on condition of anomymity, offers a different angle, stating that agencies face significant financial pressure from advertisers. “Once agencies win a client, they must operate on the advertiser’s terms. This often leads to aggressive negotiations with broadcasters to maintain margins, which is being interpreted as collusion.”

The Advertiser-Agency-Broadcaster Equation: A Power Shift?

One of the most pressing questions is whether these developments will reshape the balance of power between advertisers, agencies, and broadcasters.

Gujral believes that the advertiser-agency equation will move towards a more competitive environment. “Merit will become the deciding factor for agencies. Their ability to deliver transparent and strategic value will dictate their market position.”

Nayyar, however, suggests that large advertisers have benefited from the current system. “Advertisers have gained significantly as agencies deploy extensive resources to service them at very low commissions. Some agencies even offer guaranteed performance deals, further straining media owners.”

Sridhar reinforces that bulk buying inherently leads to price differences. “The primary concern raised by the CCI or complainants is that large advertisers get preferential pricing while smaller ones pay more. But that’s a natural market phenomenon – bigger buyers always negotiate better deals. It’s not unfair; it’s just business.”

A major undercurrent in this discussion is whether Jio’s dominance in digital streaming and sports broadcasting – especially with IPL – has influenced the regulatory landscape.

Sridhar downplays these concerns, saying, “Jio is a major player, particularly with IPL, which is a huge revenue generator. There are rumours that Jio’s market alignment has impacted certain business interests, but I believe these are just speculations.”

However, a media insider argues that Jio’s aggressive pricing strategies have put traditional media buying models under strain. “Jio’s ability to bundle IPL rights with other services has disrupted traditional media negotiations. Broadcasters are struggling to keep up, and agencies are caught in the crossfire.”

This suggests that while Jio may not be directly responsible for the CCI investigation, its business strategies have certainly reshaped the media buying landscape.

Impact on IPL 2025 Media Planning

One immediate concern is whether these developments will impact media planning for IPL 2025.

Gujral dismisses fears of major disruption. “Vigilance and transparency will only help advertisers. IPL remains an attractive property, and media agencies will adapt.”

Nayyar believes that smaller agencies and last-minute buyers might feel the impact. “Most IPL sponsors are already locked in. Some smaller advertisers and late buyers might face disruptions.”

Srivastava shares a similar view, stating, “IPL builds itself up as the biggest advertising opportunity, and nothing will change that.”

Sridhar sees no reason for concern. “Media expenditure on IPL will continue. As long as multiple players exist, advertising rates will be dictated by market demand.”

Red Flags in Media Buying: The Need for Reform

The CCI raids point to deeper operational issues that require urgent attention.

Gujral proposes a more structured approach. “Broadcasters should have clear pricing structures based on programming, geography, and audience reach. A standardized framework will prevent ambiguity.”

Srivastava stresses on the importance of integrity. “No one does business to lose money. Agencies, advertisers, and broadcasters must ensure fair value distribution across the ecosystem.”

Nayyar adds that agencies need fair compensation. “Necessary dues must be given to all stakeholders to ensure industry survival.”

Sridhar remains skeptical about over-regulation. “A universal pricing standard isn’t practical. The concern only arises when a market is controlled by very few players, like in telecom. Media still has enough competition to prevent that.”

A Call for Structural Change

Ultimately, the CCI raids have sparked conversations on the future of media buying in India.

Gujral argues that media buying should be brought under a regulatory framework. “A government-regulated approach, similar to other industries, will ensure fair participation for advertisers and broadcasters.”

Naresh Gupta, Founder & Managing Partner, Bang In The Middle, points out that advertisers will now face increased pressure from internal auditors, stock markets, and regulatory bodies. “Advertisers will have to ensure that their investments are clean and transparent. Agencies may need to implement better tracking mechanisms for their ad inventory and pricing.”

Sridhar, however, believes that the industry will self-correct. “Whenever large sums of money are involved, scrutiny is inevitable. But outright manipulation on a large scale is difficult. The industry will adapt, and business will continue as usual.”

With multiple perspectives in play, the question remains: Will the CCI raids lead to fundamental industry reforms or serve as a temporary disruption? Only time will tell.