GST Cut: Boost for confidence, mixed impact for TV ad revenues  

The GST relief announced on 22 September arrived like an unexpected tailwind just as the festive advertising rush was beginning to gather pace. For weeks, marketers had been sitting on the fence, unsure whether to loosen their budgets in a year marked by uneven consumption and rising media fragmentation. Then came the price cuts. 

Overnight, FMCG and consumer durable brands that depend heavily on the mass reach of television found fresh confidence, reshaping consumer messaging and sharpening their festive playbooks.

Read e4m report on why GST cuts and festive season didn't spark AdEx revival 

The result was a noticeable shift in sentiment and a visible 10 to 12 per cent lift in TV ad revenues through October, even though the announcement left little time for advertisers to rework their media plans.

With Free to Air (FTA) channels cashing in on value-seeking audiences, pay TV defending its premium turf and Connected TV accelerating to claim 6 to 10 per cent of digital budgets, the GST cut became less a tactical tax change and more a spark that re-energised a market already primed for the festive momentum.

According to industry experts, CTV’s share of digital budgets, estimated at 4 to 5 per cent last festive season, rose to roughly 6 to 10 per cent this year.

Read e4m report on GST relief lifting long-term outlook 

Despite this momentum, industry voices remain divided on whether GST cuts have translated into higher TV ad revenues or merely acted as a confidence catalyst for brands that were already gearing up for the festive quarter.

Did GST move the needle on October TV ad spends

The festive quarter traditionally provides a natural lift for broadcasters and this year proved no different, though the extent to which GST cuts contributed remains a debated point.

How FMCG is grappling with uneven GST slabs. Read more here 

Anita Nayyar, Board Advisor, IIGC, and former COO Media, Branding and Communications, Patanjali Ayurved, observed a clear but time constrained impact.

She said, “There was about 10 to 12 per cent visible impact in ad revenues. The GST cut got announced on 22nd September and that did not leave the advertisers with much time to replan budgets given that the festive was around the corner. However, the communication got rejigged with brands passing on the benefits of GST to consumers and trying to win consumer confidence and trust. There would have been an uptick in sales with the prices dropping at a category level not necessarily at a brand level for consumer durables, automobiles etc., and with festive the boost would have been significant.”

The performance of auto and durables was particularly strong, though not across the board.

Read earlier report on GST cuts sparking festive cheer

Anup Kumar, Senior Partner, YAAP Digital, noted that while categories saw a lift due to improved sentiment, structural pressures kept TV growth contained.

“After the GST cut the consumer sentiments and festive retail demand improved which helped the TV industry to stabilise and not go in the decline like previous years. Auto and Consumer durables did increase the spends to cater to the increased sales. But since many products were moving without discounts or ad support, brands did more of tactical ads Print and Digital rather than going heavy on TV. Also at the same time, the government’s ban on Real Money Gaming gave a Rs 10,000 crore hit in the annual AdEx, meaning October looked more like ‘holding ground with selective growth pockets’ rather than a full revival,” Kumar noted.

Anil Solanki, Senior Director, Dentsu X, pointed to a confluence of positive forces, including the GST relief, that pushed TV revenues upward in October.

“The October spike in TV ad revenues was a convergence of multiple tailwinds. A strong festive calendar, improved consumer sentiment, and a packed sports season created a natural lift across categories, and the GST relief definitely added confidence for brands sitting on the fence. We saw both FMCG and durables lean in more aggressively on mass reach TV. The GST cut has influenced budget allocation too, especially for value-driven and rural heavy brands. FTA benefited the most because it offers scale at lower CPT, while pay TV held its share among premium categories. CTV continues to grow as the performance layer on top of TV, especially for brands that want incremental reach among urban audiences. So rather than shifting from one to another, advertisers used a mix of FTA plus pay TV plus CTV to maximise festive momentum.”

This mix of optimism and strategic balancing played out across major buying categories.

Some experts, however, contested the notion that GST-linked price cuts should or did translate into noticeable TV revenue growth.

A veteran broadcast expert, on the condition of anonymity, said the relationship between GST cuts and TV advertising has been tenuous.

He explained, “The GST cut did not raise any TV ad revenue. It is because all this actually is for the consumer, for the end consumer to increase the uptake of the product. But that does not result in television ad revenue, because television ad revenue is dependent on a lot of factors, whether now the advertisers are looking at television as a medium for branding that product, you know, for as a medium to brand that particular product. And day by day, their interest in television, especially in the niche genres is going down. So any GST rate cut will definitely boost their sales, but that will, if it is supposed to lead to an increase in advertising, it will lead to higher advertising in the digital or the newer age mediums, not in television.”

Sony Pictures Networks India (SPNI) reported positive momentum but cautioned that much of it was driven by category specific festive demand.

A SPNI spokesperson said, “Following the GST cuts, we saw a clear improvement in advertiser sentiment through October, with several categories showing sharp momentum. The auto sector witnessed a massive upswing in spends, supported by strong festive buying intent. With the wedding season now kicking in, we are also seeing a notable rise in investments from jewellery and apparel brands, both of which have expanded their presence across key inventories.

“FMCG has been more measured, largely due to ongoing logistical issues, but we are already seeing green shoots, and we expect a more stable trend line to emerge in the coming weeks as supply conditions improve. Overall, the GST cuts have acted as a confidence catalyst for marketers,” they said.

Meanwhile, broadcast expert Rajiv Khattar observed that festive seasonality itself remains the dominant driver of ad volumes, with GST playing a limited role.

He noted, “GST cut has not impacted much on ad sales, except that companies were asked to bring forth the ads bringing in the benefits of the ad sales, which was in any case during festive times. Last 2 quarters are always sub dues as the majority of the spends have taken place during festive times.”

How advertisers reallocated festive TV budgets post GST cut

If October revenues saw a mixed impact, budget planning showed a clearer shift, particularly in the way brands structured their messaging, media mix and digital led extensions.

Anita Nayyar highlighted that the GST cut influenced messaging more than pure budget reallocation.

She explained, “More than the budgets it was the messaging that changed in favour of GST and advertising increased across FTA, CTV and pay TV. The budget allocation was driven by categories which saw GST cuts and their consumers who were reached through various screens.”

This shift in tonality across campaigns, from festive appeals to GST linked value propositions, was noticeable across durables, autos, large appliances and some FMCG subcategories.

On the allocation front, CTV emerged as a notable beneficiary, aided by rising smart TV penetration, falling panel prices and the perception of CTV as a performance plus precision layer complementing linear reach, experts said.

Elaborating on this trend, Anup Kumar said, “The GST cut influenced the media planning and messaging than simply increasing the spends on pay TV. Advertisers pushed GST savings narratives and pushed this messaging more towards CTV and digital video, while keeping FTA steady and maintaining existing pay TV levels. CTV gained from the GST driven price drops on large screen smart TVs, accelerating penetration. This led to CTV’s share of digital budgets estimated to have risen from around 4 to 5 per cent last festive season to roughly 6 to 10 per cent this year, even as linear TV continued to face pressure.”

Meanwhile, some experts believe that the surge in FTA viewership among value-driven segments made FTA the biggest immediate beneficiary among linear platforms.

As Anil Solanki noted earlier, “FTA benefited the most because it offers scale at lower CPT, while pay TV held its share among premium categories. CTV continues to grow as the performance layer on top of TV.”

The trend reflected advertisers' desire to capitalise on rural and price sensitive demand which was expected to rise due to GST induced cost reductions at the category level.

However, not all industry voices agreed that budgets shifted meaningfully across TV segments.

The unnamed broadcast expert maintained that GST cuts may change purchase behaviour but do not directly alter TV budget allocations, particularly since competition for marketing investment has intensified with digital gaining ground.

Overall, the GST cut may not have dramatically reshaped the TV advertising landscape, but it clearly influenced messaging strategies and accelerated the ongoing shift toward hybrid planning models combining FTA for scale, pay TV for premium targeting and CTV for incremental urban reach and sharper ROI.