Broadcasters & brands hope to celebrate this festive season with 10-15% revenue growth

Industry experts say brands and consumers who refrained from spending due to the economic slowdown will now loosen their purse strings

e4m by Moumita Bhattacharjee
Updated: Aug 29, 2019 5:00 PM

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Festive

With the festive season officially set to begin from Monday with the Ganpati festival, broadcasters and brands are looking forward to some recovery from the lull of the first half.

Although H1 of 2019 had big-ticket events like IPL, World Cup and the General Elections, experts say there were many brands who didn’t advertise owing to the economic slowdown and the uncertainty caused due to the implementation of TRAI’s New Tariff Order. They are now expecting this festive season to see a growth of 10-15% in revenue.

Ashish Bhasin, Chairman and CEO, Dentsu Aegis Network, South Asia, even feels the growth could be better than the previous year. “The festive season starts with Ganpati and goes on till Christmas. My estimation is it would roughly be about 10-12% more than last year.”

Rohit Gupta, President, Network Sales and International Business, Sony Pictures Networks, said the upcoming season should see a double-digit growth. “That’s because the last quarter hasn’t gone well. So we can expect at least 10-15% growth to cover up the shortfalls. But right now the plans are a bit delayed. It’s generally because of the economy and people have been sceptical about spending. A lot of brands are cutting back on spends. Mid-sized brands have been hit the hardest due to the economy.”

Pawan Jailkhani, Chief Revenue Officer, 9X Media, had a similar opinion. “The first half of the year till August has not been so great. There’s a slowdown, brands aren’t spending, and it has downgraded the projections this year as well. I am of the opinion that the next 60-70 days will be a bumper period for all of us. This is my assumption after talking to brands and marketers. The basic reason for the slowdown has been consumers cutting down on their spending. I feel it could be an 18% growth.”

TRAI Impact

Earlier this year, TRAI’s New Tariff Order created a lot of commotion. The migration to the new regulatory framework was gradual and it started affecting the Television Adex. The Pitch Madison Advertising Outlook Report 2019 revised its forecast for Adex 2019 downwards, mainly due to a drop in TV Adex in the first quarter.

However, industry experts and broadcasters believe it won’t have much impact on ad spends. According to Bhasin, “I don’t think TRAI issues will affect the growth. It hasn't affected advertising in any way so far.”

While Gupta confirmed that the TRAI issue with advertisers has been sorted, Jailkhani asserted that the post-NTO data has stabilised now. “We now see a trend of how FTA and Pay channels are doing. The point is for the festive period, penetration on TV has grown. I don’t think the ad spends will be based on NTO, it will largely be based on the fact that this is the right time to spend and advertise. They have to push the spending pattern and data is supporting them,” he said.

Vinita Pachisia, Senior Vice President, Carat India, is confident that despite NTO brands, which have not been spending much in the past few months, will look forward to the festive season hopefully taking the spends up by 40-50%. “The festive season will definitely help revive the Adex in the next 2 to 3 months. While NTO and the pulling out of FTAs from DD Free Dish has affected the channel performances leading to drop in spends, the festive season is expected to bridge the gap in spends that has seen a lull in the past few months,” she said.

The big spenders

As per experts and broadcasters, the big spenders this season will be from the automobile and e-commerce sectors. Jailkhani said e-comm will come back in a big way. “I see even automobile returning as well. They are large companies, with two-three bad quarters they can’t stop advertising.”

According to Pachisia, “In a country which celebrates one festival after another, and which is all about gifting and buying new things, we can expect a host of categories to get active this season like e-commerce, white goods, jewellery and confectionaries. E-commerce may turn out to be the biggest spender this season.”

Sudhir Kumar, Director, Offline Media, DCMN India, even predicted that the broadcasters might go for a hike in ad rates in the next couple days. “The first half of this year was heavy because of IPL, General Elections and ICC World Cup. 10% of advertisers were pretty active while the rest were in a dilemma whether to invest or not. The mid-sized brands could not afford IPL or World Cup, so they have to rely on the festive period to showcase their products. The revenue growth will be around 15-20%. Broadcasters will be seeking a hike in ad rates in this period since they have a high impact line-up during this time.”

Harikrishnan Pillai, CEO and Co-founder, TheSmallBigIdea, also said that FMCG will be a big spender this season too. “Around 40 per cent of the entire Adex comes during the festival season. These figures will be met with minor to moderate aberrations. Broadcasters will have to amp their game and look to be innovative with their offering and outlook. They will chase brands who intend to outshout competition with a comparatively leaner burn and smarter mix. Considering the festive season, e-commerce and FMCG could be the biggest spenders this time.”

On smaller channels feeling a pinch, Pillai said: “With the TRAI reassessment, smaller TV channels who are already fighting for eyeballs might be ignored by the advertiser for other lucrative options.”

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