Medialogic and PEMRA go head to head in LHC over forensic audit

Medialogic and Salman Danish are once again bouncing around the courthouses, this time in a bid to somehow try and stop PEMRA from conducting a forensic audit of its research methodology and subsequent findings. 

What is Medialogic? It is an overnight rating provider led by its founder and CEO Salman Danish. With a sample size of what they claim is a carefully selected 2,000 households, it provides advertisers with data such as what age, gender, and other demographic are watching what and at what time – allowing advertisers to optimize their buying of media. 

This means Medialogic is the company that provides television ratings, those sacred numbers that media executives cherish and hold high above all else. The only problem is, surprise surprise, their accuracy in Pakistan has been highly doubtful. So how did things come to this, and what new trouble has Medialogic gotten itself into? 

Medialogic’s background 

Of the whopping Rs 310 billion a year advertising pie that exists in Pakistan, a significant chunk of  Rs 100.75 billion is spent on television ads, according to estimates provided to Profit by media buying professionals at the respective regional headquarters for WPP and the Publicis Groupe. And with hundreds of channels to choose from, companies have a tough time figuring out what slot of airtime they should pick to push their product to best reach their target demographic. 

This is the job that Medialogic does, and for a very long time, they had a virtual monopoly over the business. In the early 2000s, when television and cable were really taking off in Pakistan, the Pakistan Advertisers Society (PAS) approached a number of companies including AC Nielsen Pakistan and Kantar to take on the role of providing television ratings for Pakistani channels. When both companies refused on the grounds of not trusting the market, Salman Danish created Medialogic and filled in the gap. 

For decades Medialogic continued to provide television ratings, and increased its sample size from 500 to 2000, and also tried to improve the technology they were using. While the sample size was still very small compared to standards in the rest of the world, everyone went to Medialogic for rating. But things started to go south in 2015 when a serious row between Medialogic and the Express group brought out the dirty secrets of the advertising industry in Pakistan for the first time. 

Court cases

Back in 2015, Salman Danish had accused the Express Media Group of bribing MediaLogic employees to manipulate and get more favorable ratings for their television shows. Express responded by claiming that Danish was trying to extort Rs450 million from them and accusing the rating provider of a wide range of illicit activities, including but not limited to kidnapping, ransom, and blackmail. 

The Express group would only be the first media house to claim that Medialogic was providing doctored ratings. In September 2018, an allegation was made by BOL TV in 2018, which alleged that Medialogic favors channels of Hum, ARY, and Geo (HAG) over all others, making its case by pointing out that despite the lack of original programming and the saturation of airing dated content on its entertainment channels, HAG secured the top three positions throughout the year.

In September 2018, a three-member bench led by former Chief Justice of Pakistan Saqib Nisar announced that TAM ratings would from then onwards come through regulatory body PEMRA. As a measure to curb malpractice in the issuance of ratings, the SC ordered rating agencies to provide the viewership data they collect to PEMRA, which would then display the data on its website and use it to assign ratings independently.

During the trial, in typical Saqib Nisar fashion, the powerful Salman Danish was paraded in front of the court, handed a contempt notice, threatened with the forensic audit and closure of his company, and publicly berated like a petulant child. And after all that posturing, he was let off scot-free. The only concession that had to be made was that ratings would now go through PEMRA and would not be directly released by Medialogic or other rating providers. 

Enter PEMRA, and enter new cases 

On Wednesday, the 27th of April 2021, a hearing was held at the Lahore High Court (LHC) for case number CM/2/27839/21 titled “Medialogic Pakistan (Private) Limited through Salman Danish Naseer Vs PEMRA through its Chairman, etc” as seen on the LHC database.

Sources close to the media regulator told Profit that the LHC has issued a stay order which bars PEMRA from moving forward with the forensic audit until the next hearing. The media regulator made the decision to conduct the audit in January 2021 after an entertainment satellite channel filed a complaint citing rating manipulation against Medialogic in August 2020. The complaint was the same old complaint that Bol and Express had made about manipulations in the ratings. Since PEMRA is now responsible for issuing the ratings, they decided to conduct the audit. 

According to the PEMRA TAM regulations 2018, which were created after BOL TV made similar allegations against Medialogic that year when a channel wants to challenge the rankings tabulated by Medialogic, it must first submit its complaint to the rating service itself. 

The regulation further stipulates that if the complaint is not redressed in seven days by the TAM service, it goes to an Appellate Forum, which consists of executives selected by the PEMRA chairman from the operations and licensing teams from a broadcast media provider, a legal wing, and two representatives from the Pakistan Advertisers Society (PAS).

According to an October 2020 letter from PEMRA, the Appellate Forum consists of English Biscuit Manufacturers managing director Dr. Zeelaf Munir and Jazz chief commercial officer Asif Aziz who collectively represent PAS while three members from PEMRA are also present.

Sources close to the media regulator claimed that Dr. Munir was the most vocal member of the Appellate Forum and was interested to set up a deep drill audit on Medialogic while her peers resisted for reasons unknown. A spokesperson for English Biscuit Manufacturers told Profit that Dr. Munir was not available to comment. However, she told Profit that Dr. Munir was not present on the day of the meeting.

The joint industry regulatory committee (JIRC) created by PEMRA is responsible for conducting an establishment survey, a performance audit through any third party, and additional tasks that ensure transparency. According to the TAM regulations 2018, the nominees of PEMRA and PAS for the Appellate Forum cannot be members of the JIRC and vice versa.

According to the regulations, the JIRC is led by an independent chairman that has been nominated by its members, which can comprise advertisers, broadcasters, media agencies, and PEMRA. The Appellate Forum is meant to dispose of complaints in 30 days and hears the complaints against the decisions of the JIRC.

According to a notification from November 2020, the JIRC comprises GroupM CEO Naveed Asghar, Starcom chairman Raihan Ali Merchant, Pakistan Television Corporation (PTV) chief marketing officer Khawar Azhar, including three members each from PAS and PEMRA, and two members from the Pakistan Broadcasters Association (PBA).

On paper, Medialogic competes with four other PEMRA approved rating agencies namely MediaVoir, Din Industries Limited, Breeo International, and The Media Trackers, the former of which was outed by Profit as being owned by Labaik Pvt Limited, the parent company to a diploma mill and BOL TV. 

Given that PAS has purportedly directed its members to only consider the ratings provided by Medialogic as currency, advertisers and media agencies do not seek alternative data from the other four, effectively creating a monopoly for Medialogic.
Industry insiders told Profi that HAG exercises significant influence over Medialogic, which the TAM service denies. 

The alleged relationship between HAG and Medialogic is mirrored with the walled gardens that media agencies deal with on a daily basis, with Facebook and Google self-reporting their audience data without any independent verification. Furthermore, these walled gardens self-report the reach of campaigns, giving advertisers no choice but to accept the data.

“With Pakistan ranked in the 108th place on the 2020 ease of doing business index, it’s not a mystery why a complaint that should have taken under 45 days to resolve under PEMRA’s own regulations has now crossed the tenth month as of May 2021,” said a retired WPP executive. “That and the irony that a rating service can stop its regulator from conducting a forensic audit, which is a practice that by its business model the TAM does regularly.”

A representative from Medialogic told Profit that they could not comment on any investigation that PEMRA may be conducting.