Can IPL 2020 whip up advertiser sentiments amid tough market conditions?

The Indian Premier League (IPL) 2020 is being held under some of the most challenging conditions. This is the 3^rd time in its 13-year history that the tournament will be held outside India. As reported earlier, IPL 2020 will be held in the United Arab Emirates between September 26 and November 8. However, it is now learnt that BCCI wants to postpone the finals to November 10. This edition of IPL will comprise 60 matches to be played over a span of 44 days.

Also read: With lockdown extended, IPL 2020 ‘postponed indefinitely’, BCCI tells franchises

Being held amid the global COVID-19 pandemic, it is not clear as of now whether viewers will be allowed inside the stadiums. But there are more worries ahead. As per news reports, cricketers from Australia, England and New Zealand will be late for the tournament. They form part of the Mumbai Indians and Royal Challengers Bengaluru teams.

But the challenges notwithstanding, IPL is expected to garner eyeballs and revenues in its 13^th edition as well. This would probably be the first live sports events from India on TV screens. Over all the previous editions, IPL has proved to be one of the best sources of ROI with millions of people glued to their screens during the tournament. According to BARC reports, in 2019, a whopping 462 million viewers watched the 12th edition of the IPL, which was 12 per cent more than the previous year. The 12th edition had also fetched broadcaster Star India advertising revenues of more than ₹2,000 crore.

All categories are seen to have massive ad exposures in the tournament – ranging from FMCG to EdTech, Banking and Auto. Some of the top spenders over the years have been brands like Coca-Cola, Pepsi, Dream11, Vodafone, Swiggy and Maruti, besides current title sponsor Vivo.

However, with the global pandemic, media reports have quoted many experts as predicting a 25-50 per cent drop in brand spends due to the rescheduling of the tournament this year.

Santosh N, Managing Partner D and P India, Advisory LLP and External advisor, Duff & Phelps India, told Adgully, “Due to the current economic scenario, many companies who were big advertisers in the past might be impacted, thus affecting their ability and willingness to spend money on advertisement. Considering that IPL is a unique property and there are limited entertainment options available, with people largely confined to homes in the forceable future, advertisers might take the opportunity to put their brands in front of the consumers. This might coincide with surge in viewership this year.”

He further said, “Due to the current COVID-induced economic situation, the advertiser sentiments will not match up to pre-COVID times. Though the entire ecosystem has suffered, IPL has the potential to ensure that the sentiments change once there is more clarity on the schedule of the tournament. With limited supply of content, advertisers have limited options and hence, IPL could be a beneficiary.”

Commenting on the advertiser sentiments for IPL 2020, Naresh Gupta, CSO and Managing Partner, Bang in the Middle, said, “The advertiser sentiment around IPL will be muted. One, the tournament is not happening in India; two, the games will most probably be played in empty stadiums; and three, the viewership numbers may really not match up. There are bigger issues facing the country and an IPL may not pull people out of it. The big advertisers have been telecom brands and e-commerce portals. Both will be balancing the monies between the festive season and IPL, and both will cut ad budgets. I suspect Star will cut long-term deals to get the advertisers back, but it’s a long walk ahead.”

On the other hand, Lloyd Mathias, Business Strategist and former Asia Pacific Marketing Head of HP Inc., remained optimistic and said, “I think advertisers will look at the IPL as a big opportunity to ramp up activity and rejuvenate the market, given the long lull in business due to the COVID-19 pandemic.”

Here, there is one definite opportunity for advertisers to bundle up. The pandemic has caused the IPL to be scheduled during the festive season in India, and advertisers will be looking to make the most of this opportunity.

Ambi M G Parameswaran, Brand Strategist & Founder, Brand-Building.com, too, believed, “Holding the IPL just before the peak Diwali buying season is a great initiative to prod, push and nudge reluctant shoppers to go out and buy. Unless brands take the initiative to woo the consumers with exciting new products and tempting offers, backed by high decibel multi-media advertising, we will not be able to get out of the current state of market and mood depression.”

In a similar vein, Santosh said, “Yes, as compared to other sporting and entertainment properties during these times. With no other entertainment option available to the audience due to the closure of theatres, recreational clubs and most people preferring to stay indoors, it does provide a fantastic opportunity for the advertisers, as the viewership for this year’s IPL is bound to increase substantially.”

While FMCG, Auto, E-commerce and Mobile Phone sectors spend massively on IPL and are expected to take the opportunity this time, too, we can also expect some newer digital players to come aboard. While the digital sector in India has always been growing, we've definitely seen the pandemic act as a catalyst for this sector in terms of growth and rate of adoption. Several gaming, social media and short video format apps will be looking to gain visibility through the IPL. Mathias said, “With the digital ecosystem getting a big leg up during the lock down I see a lot of new age digital brands – for instance, the competitors of TikTok – making a grab for eyeballs during the IPL telecast.”

As we all know, the IPL has been one of biggest sources of revenue for Star India over the years. As mentioned above, more than ₹2,000 crore was the ad revenue earned last year and the total value of the franchise has grown to $6.8 billion.

Live sports have been more or less absent from the market in the last few months. IPL will come as a ray of hope for all cricket fanatics and sports lovers.

Santosh noted, “With T20 World Cup and Asia Cup postponed, IPL is the only major sporting event and a crowd-puller. Star will garner a major portion of the ad revenue. However, due to the entire ecosystem being impacted, Star may not be able to earn the sort of ad revenues that they might have envisaged for the current IPL.”

Besides giving viewers their dose of cricket entertainment, IPL is also being seen as people reclaiming a semblance of normalcy in their lives, even as they remain confined to their homes, maintain social distancing, take strict measures to protect themselves from getting infected. It comes as a respite from the tough realities – economic slowdown, job and salary cuts, India-China LAC row, and very muted market conditions.