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Will the IPL 8 ad rates see an increase of 10-15%?

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Will the IPL 8 ad rates see an increase of 10-15%?

Cricket fans in India are gearing up for two big tournaments in a span of the next three months. The annual edition of the India Premier League (IPL) will begin on April 8, 2015, barely a week after the ICC World Cup.

Earlier, exchange4media had reported that ad spends for both these properties were expected to touch Rs 2,000 crore. Of this, media planners expect IPL 8 to generate ad revenues around Rs 1,000 crore. (ICC World Cup, IPL estimated to garner television ad spends of Rs 2000-cr )

Though a significant amount of ad spends from brands are expected to ride on these two properties, it cannot be ignored that the inflationary ad rates have had an effect. We, however, wanted to see how much the ad rates have increased and how will this affect the decision of marketers.

Increase in ad rates

Rohit Gupta, President of Multi Screen Media (MSM), said they have increased their ad rates for IPL 8 by around 10-15 per cent.

Media reports  also stated that ad rates during the previous season (IPL 7) was around Rs 4.5-5 lakh for a 10-second spot, while marketers and media planners said it was around Rs 3.25-3.5 lakh. The ad rates of Rs 4.5-5 lakh for a 10-second spot would be the card rate for individual spots. According to media planners as negotiations are done in bulk buying,  the ad rates may slide down.

However, marketers and media planners say they are yet to receive an official communication on ad rates for the IPL this year.

Senior media planners had expected the ad rates for IPL 8 to increase by 10-15 per cent or even higher. However, if the previous ad rates as suggested in media reports (Rs 4.5-5 lakh per 10 second spot) are to go by, 10-15 per cent increase would take it approximately to Rs 5-5.75 lakh for each 10-second spot in 2015. This, media planners say, would depend on negotiations of rates and depending on the individual marketer or client needs.

Gupta said, “IPL is a robust platform, there are no risks and the ratings have been growing consistently year on year. Even last year, despite the elections, the ratings grew by 7-10 per cent in various TG’s. There is no risk, especially for advertisers. When you put in such large money, the appetite for this going down is very low. This is a sure-shot property, so you know at the beginning what it is going to deliver and there are no risks. Last year, we had increased the rates in line with the viewership growth. We took a 10 per cent increase and there was an 8-10 per cent increase in ratings, so the overall ROI for the client is still at the same level.”   

However, the future of two IPL teams -- Rajasthan Royals and Chennai Super Kings – which face charges of match-fixing in court has cast some doubts regarding the revenues the property is expected to generate. This is especially if the court takes the decision to ban the teams.

“The rates of IPL will anyway go up. The only thing is your total outlay may reduce because there are a couple of teams which might not play this year. This means the total number of matches may reduce and your total outlay may come down. What they might do is stick to the per match rate with slight inflation,” Dinesh Vyas, GM, OMD.

Gupta said, “Nothing is going to happen to the teams. The ownership might change. We will have to wait till the court’s judgement. The court has not said anything about the teams and has allowed the tournament to take place. It is against individuals and not teams.”

Property a safe bet for marketers

A number of media planners also believe we spoke to also believe that, things will not see change much as marketers continue to view the property as a safe bet.

“The IPL would relatively be far more creditable, so you will get a minimum number in terms of ratings. Last year, it clocked about two and a half ratings for the entire season. This time, it might be around that or a little less,” said Mayank Shah, Deputy Marketing Manager at Parle Products.

Karthik Lakshminarayan, COO of Madison, said marketers felt it was a safe bet. “IPL is a well-established property. It is something people look forward to. The time is good. It is at the start of the financial year and brings a lot of brand ad spends.”

Shah, however, highlighted the fatigue factor that some marketers would look at as it would be just after the ICC World Cup. “As it is happening just after the World Cup, there would be some kind of fatigue. In fact, the performance of IPL would be inversely proportional to the performance of the Indian team in the World Cup. If the team performs well in the World Cup, it would have an impact on the IPL ratings as it would see a slowdown because of higher fatigue. But if India does not perform well like in the 2007 World Cup, IPL would do better as people would not have seen the full world cup and there would not be that kind of fatigue.”     

Despite the increase in the ad rates, IPL 8 still seems to be perceived as a property that can deliver, and will be tough competition for the ICC World Cup 2015 as a destination for advertisers this season. 

Kranti Gada joined the family business at Shemaroo in 2006 after a successful stint of over two years in marketing at Pepsi Co. She has been associated with the company for 12 years.

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