GECs: Post-pandemic trends fuel fluctuating ad rates

As digital’s clout grows, the debate over TV’s future persists, with general entertainment channels (GECs) navigating a volatile ad market. The key question now is: how much has digital really taken over, and is it the only factor influencing TV’s performance? While ad spend projections show digital outpacing TV, GEC ad rates continue to fluctuate. Even Hindi GECs, long-standing leaders in TV advertising, are adapting to pressures not only from digital growth but also from economic factors like post-pandemic recovery, consumer confidence, FMCG trends, and rural demand.

However, media planners point to an emerging trend: Brand Bharat is proving resilient, as advertisers increasingly turn to regional GECs to capture specific demographics and boost ROAS (return on advertising spends).

“Hindi GEC ad rates have dipped by about 10%, while regional GECs have surged by 20%,” said the head of a Mumbai based media buying agency. 

"Though ad rates haven’t fully rebounded to pre-pandemic levels, regional channels are experiencing a steady comeback as the market stabilises."

What do existing ad rates look like?

While ad rates are always fluctuating and depends on a host of factors like the channel popularity, time slot, program popularity, media relations, client-to-client discounts and others, the costs typically start at around Rs 5000 per 10 seconds on smaller channels. Prime-time slots on major channels or during special events can reach several lakhs for a 10-second ad slot. 

The current advertising rates for Star Plus are estimated to be  between Rs 1,50,000 and Rs 2,00,000 per 10 second for video ads, while Aston Band (advertisement played on the bottom of the screen) rates range from Rs 18,000 to Rs 21,000 per band. 

Sony Entertainment Television (SET) has similar video ad rates, ranging between Rs 1,50,000 and Rs 2,00,000 per 10 second. 

Zee TV's video ad rates range from Rs 30,000 to Rs 40,000 per 10 second, while Colors TV charges between Rs 80,000 and Rs 1,00,000 per 10 second for video ads.

According to industry experts, video ad rates for Hindi General Entertainment Channels (GECs) have dropped by approximately 10% since the pandemic. This implies that pre-pandemic rates for SET were likely between Rs 1,65,000 and Rs 2,20,000 per 10 second slot, Zee TV’s rates between Rs 33, 000 and Rs 45,000 per 10 second, and Colors TV between Rs 88,000 and Rs 1,10,000 per 10 second.

For regional channels, Star Jalsha’s video ad rates currently range from Rs 25,000 to Rs 35,000 per 10 second, with Aston Band rates falling between Rs 22,000 and Rs 25,000 per band. 

Colors Marathi charges between Rs 5000 and Rs 10,000 per 10 second for video ads, while Zee Marathi’s rates are slightly higher, ranging from Rs 12,000 to Rs 15,000 per 10 second. 

Aston Band rates for Zee Marathi are more premium, ranging from Rs 22,000 to Rs 27,000 per band.

Pre-pandemic ad rates for Star Jalsha were anywhere between Rs 18,000 and Rs 28,000 per 10 second, Colors Marathi between Rs 4,000 and Rs 8,000 per 10 second, and Zee Marathi between Rs 9,000 and Rs 12,000 per 10 second.

Rohin Desai, chief client officer - media buying at Madison Media, explained how content investment is driving ad rates back to pre-pandemic levels.

“During COVID, audiences primarily received repeat content, which influenced lower ad pricing. Now, with publishers and broadcasters investing in fresh content, ad rates have returned to pre-pandemic levels. Typically, rates are governed by TVRs, which are closely tied to the quality and appeal of the content,” he said.

Impact on ad volumes

According to a TAM report, the ad volume share of GECs has dropped by 6% in H1 2024 compared to H1 2023.

An industry veteran told e4m that the underperformance of GECs in terms of ad volumes during the first half of 2024 was largely due to stagnant content, as many long-running soap operas have failed to innovate, causing viewer fatigue. 

“The rise of Connected TV (CTV) and OTT platforms offering fresh content, along with major sports events like the IPL, two World Cups, and elections, have further slowed GEC growth,” they said.

Another expert said that ad inventories remained under-booked this festive season, reflecting cautious advertiser sentiment. Even with potential improvements, the impact will be delayed due to advance campaign planning cycles.

How show ratings drove ad pricing adjustments?

As explained by Desai, content ratings are a major factor influencing ad prices, as higher-rated shows command premium rates. Recently, ratings have been volatile for some shows, affecting ad rate stability and advertiser confidence in specific time slots.

Current ratings data for popular Hindi GECs highlight both challenges and opportunities for channels.

One of the best performing Hindi show on TV airing on Star Plus, Anupama had a rating range of 2.5 and 2.6 between weeks 35 and 38.

Star Plus’ other Dil Ko Tumse Pyar Hua has garnered ratings between 0.6 and 0.9 during weeks 29-38, and Do Dooni Pyar has seen ratings of 0.4 to 0.6 during weeks 35 to 38, indicating that there is still hope for Star Plus to enhance its viewership with better-targeted content.

Some recently launched shows on Colors TV channel like Mishri experienced a rating between 0.7 and 0.9 from week 27 to week 38. Similarly, Megha Barsenge saw a rating between 0.6-0.9 from weeks 32 to 38. Another show Suman Indori saw 0.5-0.6 rating in weeks 36, 37 and 38.

Breaking down the rating data, while there’s no strict standard for a successful TVR, experts suggest that ratings above 2.0 or 3.0 indicate popularity, depending on the market and time slot. An average TVR ranges between 1.0 and 2.0 (or 3.0), while anything below 1.0 signals a smaller audience.

While there’s no strict standard for a successful TVR, experts suggest that ratings above 2.0 or 3.0 indicate popularity, depending on the market and time slot. An average TVR ranges between 1.0 and 2.0 (or 3.0), while anything below 1.0 signals a smaller audience.

Experts also pointed out that said that most of the top GEC channels work on CPRP (cost-per-reach point) basis with regular (larger) clients. 

CPRP is the cost of achieving a 1% gross rating point (GRP), or 1% of all households with access to television.

“From a rates perspective, costs have remained stable or slightly increased post-pandemic. We’re also witnessing a shift from fixed-time viewing to the convenience of on-demand watching on OTT platforms, as more audiences move toward digital. However, GECs maintain stable rates for premium events and popular shows that continue to draw large viewership segments. Retaining traditional audiences and offering exclusive content are crucial for GECs to sustain ad revenue in a shifting media landscape," Anil Solanki, Senior Director at Dentsu X, told exchange4Media.

Deep discounting trend

Experts closely working with GECs note a trend of offering deep discounts on a client-by-client basis over the past two years to attract more advertisers and provide better ROAS. The discounts start at 10% (on rate card) and the upper limit is decided on a client-to-client basis. 

“Star, specifically Star Plus, has been a notable exception, refraining from significant discounts. Their flagship show Anupama remains the top performer, and overall, their shows have outpaced many competing programs,” shared a media planner.

How macroeconomic pressures drove major advertisers like FMCG and auto reassess ad spends?

Another notable change in the overall television advertising space is that FMCG companies have cut back on television advertising spending due to macroeconomic factors, prioritising sales over marketing. 

Lower purchasing power post-COVID has led to decreased consumption of certain FMCG products, prompting shifts in marketing strategies and reduced ad expenditures, said industry observers. 

For instance, in Q2 2024, Dabur experienced a nearly 18% decline in consolidated net profit, amounting to Rs 4.25 billion. The company cited subdued urban demand and the impact of heavy rainfall and floods as key factors affecting performance.  Their advertisement and publicity expenses turned out to be Rs 225.63 crore, which was 4% less than Q1 FY25 when it was Rs 235.89 crore but also 4.2% higher than Q2 of FY 2023-24.

The advertising landscape for the automobile sector also presents a mixed picture. Industry leaders like Maruti Suzuki, Tata Motors, and Hyundai have maintained their ad budgets, projected to remain at 2023 levels. In contrast, companies like Mahindra & Mahindra, MG Motors, and Skoda have significantly reduced their ad spending, according to industry estimates.

For example, Mahindra & Mahindra’s ad budget is expected to be around Rs 310 crore this year, a steep drop from Rs 890 crore in 2023, with Rs 200 crore already spent by August. MG Motors is projected to spend Rs 110 crore, over 60% less than last year’s Rs 290 crore, while Kia India’s budget may shrink to Rs 170 crore, nearly Rs 100 crore below the previous year’s expenditure, based on current spending trends.

The performance of these sectors, along with others like commodities, will be pivotal in shaping advertising investments in the coming months, as companies adjust their strategies to align with consumer demand, economic pressures, and evolving market dynamics.