With its loss to Sri Lanka, the chances of India making it to the Super Eight is completely reduced to Bangladesh losing to Bermuda on March 25, 2007 and some calculations thereafter. The situation has raised concern in the media fraternity given the erosion in value that this means to advertisers.
Experts across the industry are clear that this means significant loss to the advertisers on the series. The course to rectify this is still being considered. Where some media heads state that such risks were already factored, some are of the opinion that this would lead to renegotiation of all deals on the forthcoming matches, and some are more diplomatic that a collaborative containment exercise has to be undertaken. After all, the stakes are as high as Rs 450 crore to Rs 600 crore.
No renegotiation: SET India
The channel is clear that all deals are watertight and that no changes would be made in that. SET India’s Revenue Head Rohit Gupta said, “In the whole series, 45 matches are without India. We did no deals keeping India’s performance in consideration. We didn’t just increase the rates in the last World Cup when India went to the finals, so why should there be any renegotiation this time?”
However, Gupta does agree that with India out, the Network would face problems for the saved inventory. Gupta explained, “We’ve already sold the entire tournament. There is 5 per cent inventory that we had kept for the India matches later and we are aware of the problems that we can face in selling that, but this really is a part and parcel of the game and it is ok. Advertisers on the series are also fully aware of the risks involved and they always have a back up plan.”
Various advertisers like Visa and Pepsi have creatives that are clearly India inspiring and completely on the world cup. In addition to that, other channels, especially news channels have devoted significant amount of time to world cup coverage and with India out, the interest in the tournament wouldn’t really be mass enough to continue such programming. For such players, there has to be a back up plan – both in terms of content strategies and revenue strategies.
Containment Exercise: Media Buyers
Reportedly, players like Dentsu worked out bulk deals with SET India that involved underwriting a certain amount. While no official comments have been forthcoming on this, India being ousted from the tournament surely is bad news. Renegotiation really isn’t an option here, considering the agencies involved here will have to make good the losses incurred.
Players like GroupM state that it is too early to comment. Vikram Sakhuja, COO, GroupM South Asia said, “India’s loss is a crushing disappointment. There surely will be erosion in value with this and you don’t need me to tell you that. However, we have to see how best to manage this. It is still early to say how this turns out.”
“The viewership will definitely be affected,” said Shashi Sinha, CEO, Lodestar Universal. Where Sakhuja and Sinha are sure that viewership will come down by half with India out, Lintas Media Groups’ Director Lynn de Souza said, “While negotiating our sponsorships, we used a proprietary ratings predictor that worked on several scenarios, India being in the final, semi-final and Super Eight. We really didn’t expect India not to make it into the Super Eight at all. Having said that, for some target groups, the first innings of the matches between good teams will still get viewership.”
Voicing yet another school of thought, Starcom Mediavest Group’s CEO, South Asia, Ravi Kiran said, “Any generic estimation of loss to advertisers is a misnomer and can be misleading. Sure, if India’s World Cup campaign ends abruptly, many marketers would have paid a significantly higher CPRP than otherwise; but I am not sure we can call that a loss.”
“All evolved marketers and their agencies know that cricket, particularly the World Cup, comes with inherent risk. I am sure risk-return analyses are done before investing their money. To say that they would lose, somehow shifts the responsibility and to me, that sounds puerile,” said Ravi Kiran.
“For some advertisers especially those who built creatives around the World Cup and who go for mass TG’s, the loss will be greater,” observed de Souza. Sinha added here, “Even as this is a loss for every advertiser, for the ones who chose this property to launch new products, it would be quite a situation to handle. The marketing strategies, in some cases even the content of the communications at present, would’ve to be tackled.”
Deal or no deal, other genres gain
On whether this would lead to any renegotiations, Kiran replied, “This is a bilateral issue between advertisers and the TV station and it is not possible to offer a solution that will be uniformly applicable to all.”
While some GroupM officials have hinted that they are looking for discounts, Sakhuja said, “This is due to no fault of advertiser or the channel. We really have to collaboratively find a solution for this.” Sinha agreed with him, almost word for word.
Some are being diplomatic on their intentions to renegotiate but the likes of de Souza are more forthright. She stated, “We have to renegotiate and reschedule with the channel based on the expected fall in ratings.”
Experts also see this helping other genres. Kiran said, “I have read reports that there is likely to be significant pipeline clogging of manufactured goods such as TV sets, as a result of early exit of India. This means TV marketers would have to invest more post the event, in order to clean the pipeline. Since they can do this only by using other TV stations and other media, I foresee a temporary spike in revenues for other channels and newspapers.”
“Mass channels should see some gain due to this but this really is too short term,” said Sinha,
Another kick to the ‘cricket dream’
While there is still time to see what really does happen, one aspect that has surely got hit is the Indian cricket dream. Indian fans can be forgiving and perhaps so can the Indian advertisers. However, according to media heads, this experience will create further fear on placing any monies on cricket. Sinha summed this up, “To my mind, a fundamental leg on investing is fast losing credibility in the advertiser eye and this really is our fault.”
“There are properties like Super Bowl and basketball leagues in international markets that are not linked to a team’s performance and we have miserably failed in creating something like that in India,” added Sinha.
Sakhuja commented, “I would love to ask Sachin and Dravid and each one of the team members to give back some money to the advertisers and they have that kind of money too.”
de Souza had a word of caution, “I think it is important not to overreact too much, emotions go up and come down. The media, especially the news channels are doing a lot of damage to the spirit of the players and the game, they are obviously trying to capitalise on this loss and get in ratings, but there is a social responsibility that they must now display which I find only NDTV doing.”