News channels feel the pinch as lockdown-hit SMEs freeze ads for months
With MSMEs in FMCG, education, BFSI, real estate, retail, etc. being selective with their spends, news channels had to live off ads coming in from large corporations in the last six months
In the last six months, news channels lived off on corporate brand ads only as marketing budgets of local brands reduced to a trickle. Hit by the pandemic, local and regional brands froze their television advertising budgets for the most part of the lockdown and early unlocks phases. This brought down the ad bills from the sector by close to 70%-80% for news channels.
As per TAM data, national categories' ad volumes on news genre grew by 29% between August 2020 and October 2020 compared to same period last year. Whereas in regional categories, ad volumes declined by 5% during the same period. Compared to the 300 plus categories that advertised on news channels (both national and regional) between August and October this, only about 80 categories came on board for news channels across board.
News channels felt the pinch in the absence of regional players, especially the regional channels and regional outfits of national channels.
“The MSME sector is a critical part of the revenue stream of the regional channels. Each market has a different make of the MSME play, some seeing strong double digit contributions. For understandable reasons, the AMJ quarter saw a steep drop in the visibility of MSME advertisers, space that was filled in by larger corporate advertisers,” said Karan Abhishek Singh, CEO, Language Cluster, Network18.
Larger corporate advertisers indeed saved the day for news channels. As per TAM data, in the Hindi plus English news genre, cars category topped during both the periods (Aug-Oct'19-20), five of the top 10 categories were common between both the periods. Also, the top10 categories added 35% and 30% share of ad volumes during August 2020-October2020 and August 2020-October 2020 respectively.
“Reduced marcomm budget was the primary reason why most regional brands stayed away from advertising. Sales for the MSME sector fell to zero and even while airtime prime was slashed on news channels these smaller brands couldn’t afford to advertise on the medium. Popular regional brands in the jewellery category or even in the education sector brought down their budgets massively. Television which is mostly used for brand building was completely out of the marketing mix for most regional brands in the last few months. Regional news channels that make more than 50% of their ad revenue from regional brands have felt the maximum heat,” said a media buyer.
“The MSME category has reduced its advertising budgets by over 60% on the back of Covid-19, with key categories like FMCG, Education, BFSI, Real Estate, Retail etc. being selective with their spends,” said Gaurav Dhawan, EVP – Revenue, Times Network.
Among other sectors, regional retail and education (non digital) were two of the categories that couldn’t afford the price of airtime for the longest part of the first and second quarter.
“Retail took a major hit because people didn’t want new clothes during a good part of the lockdown and April to August which is the peak season for private schools and colleges also fell flat for them hence keeping them away from advertising. While during the initial phase of the lockdown the ad bill from these categories fell to zero it picked up only moderately in the later stages,” said Vikram K, COO South at TV9.
As per data the ‘retail outlets-clothing/textiles/fashion’ category that had a 10 share in the top ten regional brands on Hindi and English news channels last year fell to 3% this year between August and October. The category also fell from the second spot of top ten advertisers to the tenth spot this year.
Likewise, schools that contributed 8% to ads from the regional categories was nowhere to be found in the top ten categories of advertisers between August and October this year.
Even as the situation starts to show improvement regional players are re-planning their advertising budgets and strategies on news channels. “Unlike other times, brands are not going to park a budget for a month. They are only looking at high impact inventory now,” Vikarm k added.
This has also been the trend for regional brands that chose to advertise in the initial months. “The sector has largely been active on high decibel opportunities like PM Speech, FM Speech,” said Dhawan.
However he also said that the category will see green shoots in months to come as the consumer sentiment improves.
Given the regional brands are important contributors in ad billings, news channels are also helping the brands drive growth and be back in action with customized solutions.
“At an overall level, we have seen that in the last 3-4 months, the local retail/ MSME sector is starting to get back on its feet. This is obviously in line with the Covid situation in each market. Across our markets, we are also ensuring editorial coverage to ensure that the issues and concerns of the MSME sector are brought to light, alongside ensuring visibility of various government initiatives that help ease and fast track the resurgence journey of the sector,” Singh said.
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