T20 + IPL 2nd leg are expected to add Rs 3,500 cr to festive ad revenues, say experts
After seeing a drop in ad volumes and revenues during the lockdown and pandemic period in 2020, TV advertising is witnessing a strong growth in the unlock period. The second wave of COVID-19 earlier this year failed to dampen brands and advertisers’ investments in television. Virtually all major categories – FMCG, Consumer Durables, Auto, OTC products, Personal care & Hygiene and more – have increased their spends on TV.
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As the vaccination drive gathers momentum and with the number of COVID-19 cases stabilising, the country is on a rebuilding mission and faster resumption of economic activities. The fear of a COVID-19 third wave notwithstanding, marketers are upbeat about a bumper festive season this year, what with back-to-back cricket bonanza in the form of second leg of Indian Premier League (IPL) 2021 and the ICC T20 World Cup, which follows immediately after.
Why TV continues to be buoyant?
Advertising on TV increased by 14% during July’21, as compared to July’20, according to TAM AdEx’s comparative analysis of TV ad volumes in July 2021 vis-a-vis July 2020. Without the Sports genre, the increase in July’21 over July’20 was 13%. Ad Volumes on Television increased in all weeks of July’21, compared to the same weeks in July’20, with the highest growth (16%) occurring in Week 1 of July’21.
Commenting on the expected revival of TV ad spends during this festive season, Kaushik Chakraborty, Senior VP, iProspect India, said, “Despite the expected Third Wave of COVID-19 pandemic, this festival season is expected to be good. This anticipation can be attributed to the vaccination drive, which has already imparted 56.2 crore doses and has made people more equipped to step out and enjoy their festivals. Alongside, manufacturing and production are rebounding, with sectors like Auto, Telecom, FMCG, etc., making a comeback. With two major cricketing events along with a plethora of reality shows like ‘Bigg Boss’, ‘KBC’, ‘IGT’, etc., lined up, advertisers are bound to look for avenues to promote their products, the upcoming months are exactly what the market has been waiting for.”
Richa Khandelwal, Brand Spokesperson, BL Agro, pointed out that the lockdowns had restricted almost all business activities. So, naturally brands had refrained from advertising. “As a result, advertisers are left with un-utilised budgets that are now available for spending. As the businesses are planning to make the most of this period, where the COVID-19 situation in the country is under control and consumers want to spend on purchases, we can expect the festive quarter to be a bumper one, which may even exceed the pre-COVID-19 level,” she added.
The suspension of IPL earlier this year due to growing number of COVID-19 cases in the country had a major impact on TV advertising. BCCI decided to temporarily suspend the tournament instead of cancelling it and hold the remainder of the matches when the situation improved. Thus, instead of being a total washout, brands preferred to wait out the interim period. Now that the tournament is resuming, even if in a foreign country (the UAE) instead of India, brands are upbeat about the tournament as it coincides with the festive season in the country.
Snehil Gautam, Head of Growth & Marketing, Housing.com, remarked, “The fact that there is an underlying demand after a long dry spell, the fact that affordability of goods and projects has increased because of a low interest rate regime, and the fact that business have to rely heavily on discounts this festive season to score over their competitors, are some of the biggest factors that would determine the ad spending decisions of businesses in India this year.”
Ramalingam Subramanian, Head of Brand and Communication, CoinDCX, noted, “The biggest factor for ad spends on TV has always been High Impact Shows & Properties across channels and during the second half of 2021, both GEC and Sports genres have some very high impact properties scheduled to go live. In Sports we have the second half of the IPL and of course, the World T20, which is highly anticipated. For instance, recently we were the co-presenting sponsor of the ICC World Test Championship and India Vs Sri Lanka T20 series as we wanted to tap the millennials and raise awareness about crypto among them. Since the game of cricket is specially watched by the young generation, it was the apt strategy to get their attention.”
Tapping the Tier 2/3 & rural markets
With more than half the television audience coming from Tier 2 & 3 cities and rural markets, reaching out to those audiences has become critical for brands looking to expand their user bases and their footprints. Commenting on this, Deba Ghoshal, Vice President & Head of Marketing, Voltas, said, “We have always believed in adopting a more streamlined approach for upcountry markets, since we have the highest distribution reach in the AC industry. There has always been an increasing need of home appliances in the Tier 2 and 3 markets, which will get stronger post-COVID-19. These markets have always been one of the main audiences when it comes to the reach of TV as a medium. Entry level products, as we have experienced with our range of ACs, Air Coolers, Direct Cool Refrigerators and Semi-Automatic washing machines, work better in Tier 2 and 3 markets. And television helps us to stay relevant and engaged with that audience.”
Sandeep Goyal, Managing Director, Rediffusion, observed, “Non-metros drive consumption substantially. So, their well-being is a big determinant of TV spends. Aspirations and affordability in these markets are growing more and more. And brands want to encash that.”
BL Agro’s Khandelwal pointed out that the pandemic made several brands realise that future growth lies in Tier 2 and 3 cities and rural markets. Reverse migration, favourable government policies, growing awareness, aspiration and income of people are the key factors that have contributed to the continuous growth of smaller cities. Also, compared to the metro cities, Tier 2 and 3 cities faced lesser wrath of the pandemic. “Add to it the saturation that brands are facing in the top cities, Tier 2 and 3 towns seem to be the new battlefields for the share of their ad spends,” she added.
Citing various industry reports, Khandelwal stated that Television is one of the most consumed media in Tier 2 and 3 towns and added that it also enjoys very high levels of ‘Trust in Advertising’ among consumers in these towns.
Speaking about the categories/ sectors that are expected to spend heavily on Television, Gautam of Housing.com noted, “We have seen that apart from the traditional favourite which is FMCG, e-commerce and consumer durables have increased their share in the advertising pie to cater to changing consumption patterns. For obvious reasons, profits margins for sectors like healthcare, automobile, home care service companies, real estate advisors, financial trading services companies, etc., have increased, as the pandemic has imposed restrictions on mobility.”
“For the festival season this year, the leading categories which are expected to advertise in the Consumer Durables basket are Home Appliances and Mobile handsets. One can also witness the Automobiles category investing in TV as an important medium. As well as E-commerce brands,” he added.
The OTT factor
With fresh content drying up on television in 2020 as strict COVID-19 protocols prohibited shooting of films, TV serials, web series and ads, people started to consumer more and more of OTT content, hence leading to a tremendous spike in the viewership and subscription base of this medium. Even before the pandemic hit the country, a look at Y-o-Y data makes it clear that the digital medium which encompasses OTTs, has been increasing its share in advertising revenues over the last couple of years, overtaking the print medium by considerable margins. This has been a tremendous fight for the TV broadcasters during the lockdown, as the leading General Entertainment channels had to resort to airing old classic shows since fresh content was unavailable.
Speaking about OTT eating into TV’s share in terms of time spent on the medium as well as ad revenues, CoinDCX’s Subramanian said, “OTT has grown at a much faster rate than TV, but TV is itself growing at a 7-10% rate year-on-year and has currently reached 60-65% of the overall market only. It’s not exactly a binary situation yet, because most consumers (except pockets in urban areas, perhaps among younger demographics) consume both OTT and TV and look at different sets of programming on each. Hence, in the future as well, TV and OTT will co-exist and we expect both to grow for the next 5-10 years.”
The recent report by BARC highlighted that the TV advertisement volume registered in June 2021 was the highest when compared to the same period in 2019 and 2020, despite the impact of the second wave of COVID-19. This growth must be seen in conjunction with the fact that TV still contributes the highest to the advertising market in India at 41%. The spike in TV Ad Spends is dependent on the third wave of COVID-19. With the festive season and cricket matches around the corner, a crucial period for advertisers has started because of the upcoming opportunities.
Chakraborthy of iProspect India opined, “Overall, the sentiment is positive, and the festive season will further add to it. Historically, the festive months of September-December contribute more than 40% of the overall AdEx. This year, the contribution will increase further with 9 weeks of intense cricket (IPL second phase and T20 WC). Also, leading GEC channels are launching big ticket shows like ‘KBC’, ‘India’s Best Dancer’, ‘Bigg Boss’, etc. Advertisers will definitely utilise this opportunity. We can expect significant growth in AdEx in comparison to 2020.”
According to him, “T20 + IPL 2nd leg are expected to add about Rs 3,500 crore. At an overall AdEx level, this year will deliver higher than 2020. The TV sector, too, will do much better than last year and help to deliver 8%-10% higher growth at FY level.”
Signing off on an optimistic note, Rediffusion’s Goyal said, “I think the second half will do well with the balance between the IPL and World Cup to come. Just pray there is no third wave.”
(Edited and Additional Inputs by Shanta Saikia.)