Festive windfall for broadcasters; ad spends increase by 20-50%
FMCG, auto, and mobile were the biggest contributors to ad spends. Revenues would have been even higher if this year's festive season had prolonged over a period of two months like preceding years
After a sluggish quarter in Q2 with revenues of many TV broadcasters not seeing much increase (Sluggish quarter for TV broadcast networks), the hopes were high for a much better quarter fuelled by the festive season. Many television players also expected this festive season to much better than the previous revved up by the contribution of new brand categories such as e-commerce apart from other categories such as mobile, auto and FMCG increasing their spends during the period (TV gears up for more festive ad spends from e-comm, auto, durables).
A substantial spike in festive ad spends drives growth
A majority of the TV channels who we spoke to had admitted to an increase ad revenues during the festive season. However, it has to be noted the base has been low the previous year due to many factors that had affected the TV broadcast market before the festive season. One major reason being the introduction of the 10+2 ad cap that had resulted in not only inventories shrinking but the increase in ad rates by broadcasters was not received well by the advertising fraternity. Apart from this, the slowdown in the economy during the previous year had affected spends.
Rohit Gupta, President, Multi Screen Media said, “All our channels did extremely well during Diwali, so we had a full sell-out. There was not a single second of inventory which was left. It depends on channel to channel. Obviously some channels have done really well and the growth has been really heavy but the base is low. But I would say an average about 20% is what it has grown.”
Similarly, Ashish Sehgal, Chief Sales Officer, ZEEL said that they had seen a 20-25% ad revenues increase during the festive season. He however said that the growth in revenues could have been much more had the festive season not been crunched to one month and instead be drawn over two months. This was due to Dussehra and Diwali falling in October and not spread across two months. “In print that is not the case as they can extend space to accommodate brands, but on TV channels, there is limited inventory,” he said.
On a much higher note, Lavneesh Gupta, COO, Reliance Broadcast Network said, “It definitely had a decent jump from what it was last year (festive season). There was close to a 50% increase on our ad revenues.”
Speaking about the ad revenue growth during the festive season Anuj Poddar, EVP, Viacom 18, Business Head, ETV Marathi said, “For us it has particularly been a good time. We have had 40% growth October over October. Part of that is also because of the channel also being on an upswing. So for us it has been a good year and a good festive season. Having the elections at the same time has contributed to it but not very significantly”. He further added, “We managed to balance the demand and supply of inventory but we managed to keep most of them (clients) in a place where the campaigns are little spaced out and in getting what they need while adjusting the political spending also.”
As the state assembly elections were during the festive period the ad revenues from election campaigns were only driven to regional channels and not mainstream TV channels. However, Poddar admitted that the ad revenue growth could have been much higher has the festive season and the assembly elections been spread across different months.
Similarly, the chief revenue officer of another network on the condition of anonymity said that they had seen a 30% increase in ad revenues during the festive period. However he said that this was from a low base during the last festive season. “Though every TV broadcaster would be saying that they have seen high growth during the festive season it had to be seen what the base for the comparison was. Last year (during the festive season) the base for brands was low as pre-election sentiments were low and as a result the inventory was low,” he said. He further added that if you would compare growth in festive ad revenues to last year it would then obviously be high.
While S K Barua, CEO, Food Food pegged the growth in ad revenues at 10-15 per cent.
Categories that drove the ad spend windfall
With regards to the brand categories that had contributed the most towards the ad revenues, a majority of the spends came from the big spending categories such as FMCG, auto and mobile phones according to broadcasters. However, it was the emergence of new categories such as ecommerce that helped increase the growth.
According to Rohit Gupta the contribution was spread across a different brand categories mainly FMCG, mobile, auto and telecom. He however added that ecommerce had spent significantly on their network and had added to the revenues. According to source from MSM, ecommerce had contributed around 15-20% of their festive revenues.
Similarly, Sehgal said that the ad spends were across the major categories such as FMCG, auto and mobile categories. These brands had maintained their brand spends while new category ecommerce had contributed to additional growth during the festive season. The contribution from ecommerce would be around 10-12% he said.
Lavneesh Gupta said, “We increased by 50% and that lift in terms of what it was last year to this year was quite wide spread across FMCG, auto sector and all the other business lines. We were not too much dependent on the ecommerce portfolio as such when we increased in our ad revenues.” Though he wasn’t able to give an exact estimate he said that revenues from ecommerce players would not be more than 10%. “So we had a well diversified brand portfolio what we had last year to this year and that resulted in the increase,” he added.
Many of them may say that it could have been even better if the festive season was not contracted in terms of duration. This increase should be reflective on their balance sheets by the end of Q3.
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