As per the recently released Pitch Madison Advertising Report, the Indian advertising industry in 2016 grew by almost Rs 5,500 crore, adding another 12.5% to the Adex to reach Rs 49,480 crore, but it narrowly missed crossing the Rs 50,000 crore mark because of demonetisation. The report highlighted that if not for demonetisation, the growth would have been 16.2% and Adex would have crossed the Rs 50,000 mark. As per the report, demonetisation knocked off Rs 1650 crore from Adex.
In absolute terms, the drop was the highest in the FMCG category. It is pertinent to note that if not for demonetisation, the November-December months would have seen a growth of at least 10-13%.
IPL season 10 and ad revenue
With IPL season 10 around the corner, the big question is: will the ad spends finally emerge out of the shadows of demonetisation? In any case, the first four months of 2017 are seen as the recovery phase and the projected growth in these four months is expected to be no more than 8%. However, the Adex is expected to swing back into action from May to October, which partially coincides with the upcoming IPL season 10.
So far, IPL’s official broadcaster Sony Pictures Networks India (SPN) has signed up 11 sponsors, including Amazon and mobile handset maker Vivo, and reportedly, it is looking to generate over Rs 1200 crore advertisement revenue from the upcoming season. For IPL season 10, ecommerce giant Amazon, mobile handset maker Vivo and telecom major Vodafone will be the presenting sponsors, while Ceat, Polycab, Yamaha Motorcycles, Vimal Pan Masala, MakeMytrip, Yes Bank, Parle Agro’s Frooti and Voltas will be associate sponsors.
If we look at the PMAR’s top 50 advertisers of India for the year 2016, there are many new entrants in this list-- Patanjali Ayurveda, Oppo Phones, Nissan Motors, Reliance Jio, Vivo Mobiles, SBI and Videocon to name a few. The top 50 advertisers accounted for 35% of the advertising market and it is highly likely that they will see IPL 10 as a potential platform for aggressive spends, given the reach and popularity of this gaming format.
There is no doubt that the Indian Premier League is perhaps the country’s most lucrative sporting event, however, unlike previous seasons, IPL 10 in particular has been missing the marketing buzz that it is usually known for. Now, the big question is: will IPL Season 10 bring back the spending sentiment and turbo-charge the Adex?
Stating that marketers will spend big on tactical advertising this year, Vani Gupta Dandiya, Marketing Director - Indian Snacks, Foods at PepsiCo India, said, “I think it is more likely to be cautious optimism. This year marketers will spend more likely on tactical or promotional led advertising to boost revenues. Although my own personal belief is that at such times it is more important to build brand equity and restore trust in brands. It is the smaller unorganised players that have gained most in demonetisation as they could extend immediate credit to trade. Big companies lack that flexibility. How many will in fact see IPL as an opportunity to restore trust is a big question. More are likely to aim for short term tactical advertising.”
Speaking to exchange4media about IPL Season 10, SPN President, Network Sales and International Business, Rohit Gupta stated, “Things in the last couple of months have been improving compared to what it was before. Moreover, IPL is a property where no one comes for just a one year association. This year we are looking at 10% plus growth and that is in line with the rate increases that we have taken and the sell out we had till now.”
Commenting on how IPL 10 will be no different from its earlier successful seasons, Harish Bijoor, Founder, Harish Bijoor Consults Inc, said, “IPL season on season has been a revenue charger in terms of advertising. I see no reason why season 10 will be any different. Yes, advertising in 2016-17 has lost out due to demonetisation. (But) I see all that money coming back with vigour once the IPL kicks off. Typically, we are a mega-sport property challenged country. IPL offers a solution in this starved category. Advertisers will act tough on rates, but no one wants to lose a saturated IPL eyeball slot.”
Underling that the upcoming IPL Season 10 will be a big motivator for the industry, Puneet Anand, General Manager Marketing & Group Head at Hyundai Motor India Ltd, commented, “If you look at Nov-Dec 2016, the drop of Rs 1600 crore in ad spends was primarily due to dip in ad spends by FMCG companies. We did have a negative growth in the auto sector but now it has jumped up and we are witnessing positive growth. I think IPL 10 will be a big motivator for the industry because the brands spends on IPL are increasing year-on-year despite the 10% increase in spot rates by Sony. It is partly because it is a high energy and high interactive kind of format and I believe that the Adex will go up this year and I foresee good spending by brands.”
“As far as brands are concerned, demonetisation is getting over now and the spending sentiment is looking positive as far as ad spends are concerned,” said Sanjay Sharma, COO, Dainik Bhaskar.