‘Eventful’ year weighs on IPL advertisement spends

MUMBAI: The high-octane match between Mumbai Indians and Chennai Super Kings last Sunday was a hit, with the IPL’s digital streaming partner JioCinema claiming to have recorded over 71.5 crore views for the match. But with all its glamour and sheen, advertising has been sluggish so far in the season, industry experts told TOI.
Typically, advertising spends during the first half of a sporting tournament remain subdued and pick up the pace in the latter half when more engaging matches are slotted.But even so, this year is different. With the general elections, T20 World Cup and Olympics all slotted to happen in 2024, brands are exercising prudence with their marketing spends which is possibly eating into the IPL’s advertising pie.
Senior media and advertising consultant Anita Nayyar describes this year as an “abnormal” one. “The T20 World Cup is a prestigious event for brands to get associated with. It is expected to garner high viewership despite being held in the US and West Indies and the difference in time zones,” Nayyar said. Besides, the prohibitive pricing has been deterring a lot of advertisers to spend on the IPL. “Ad rates have spiked. About six years ago, the rate per 10 second slot for TV advertising, for instance, used to be Rs 2.5-3 lakh. In the current IPL season, it is Rs 12-15 lakh. Even rates for digital have gone up,” Nayyar added.
In absolute terms, the percentage of money being spent on advertising compared to the overall sales volume of companies has actually reduced this IPL season, said Sandeep Goyal, chairman at advertising agency Rediffusion. “When brands attain a certain size, the threshold that they need to reach in advertising is already achieved. It’s not that their sales are going to get positively impacted by putting in more money,” Goyal said. This year, only the top five advertisers have collectively added more than 38% share of IPL ad volumes, showed data by TAM Media Research, probably explaining the uneven skew.
What’s also contributing to muted ad spends is the lack of big advertising by internet and new-age companies. Sajal Gupta, CEO at Kiaos Marketing, said that IPL advertising over the past few years was being driven by new-age firms to a considerable extent. But the drop in VC funding and a slowdown in the global tech space has nudged new-age advertisers to become careful with their budgets. While some gaming companies like Dream11, My11 Circle, fintechs Groww, Cred and Upstox and others such as Zomato are spending on the IPL, the pool has shrunk.
“For gaming companies, IPL is akin to business survival because they get nearly 60% of their revenues over this period. So, they will spend. But broadly, IPL this time is seeing more presence of traditional advertisers – auto, FMCG and paints companies. They will not be able to spend as much as VC-backed firms. We have got a massive surge in viewership on both TV and digital but advertising is not keeping pace with that,” said Gupta. Traditional companies like Parle Products, Britannia, Haier, Amul are among IPL advertisers this season, too. Even though ad spends are seen picking up in the second half, analysts are divided. Gupta, for one, doesn’t see a big uptick in broadcaster ad revenues this time over last year. Elara Capital’s Karan Taurani, however, expects IPL to close with an 8-10% growth in total ad revenues over last year. During IPL 2023, the total money spent on advertising was Rs 10,121 crore of which, broadcaster ad revenue stood at Rs 4,700 crore, according to estimates by RedSeer.
“With a massive fan base, IPL offers us a platform to capture a broader target group, we anticipate a significant uptick in sales,” N S Satish, president at Haier Appliances India.


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