'Acche din' for news: Broadcasters hopeful of 20-25% upswing in ad spends during elections
Corporate advertising expected to see a growth of Rs 500-600 crore. Political parties likely to increase spending by 20-25% in 2022 in comparison to 2017
News broadcasters are expecting a rich harvest of advertising revenue from the upcoming state assembly elections in five states namely Uttar Pradesh, Punjab, Uttarakhand, Manipur, and Goa. While corporate and retail advertisers are expected to up their allocation for news genre, the spends by political parties is also an important component that will drive the overall AdEx growth for the category in Q1 CY 2022.
TV news viewership sees an upsurge during national as well as state elections. The surge in viewership leads to a spike in demand for ad inventory on news channels. Apart from plain ad inventory, news channels also craft special election programming which provide sponsorship opportunities to brands.
Although the assembly elections will be held in five states, all eyes will be on the politically crucial state of Uttar Pradesh where the incumbent Bharatiya Janata Party (BJP) is looking to retain power with Samajwadi Party emerging as the main challenger to the ruling party.
According to the CEO of a leading news network, it is hard to quantify how much money political parties will spend on advertising since a large chunk of the political ad spends get routed through government ads. He further stated that corporate advertising will see a significant growth with Rs 500-600 crore of incremental advertising spends expected to enter the news genre.
“From January right up till counting and government formation day, the advertising by marketers on news channels will go up dramatically. Considering UP and Punjab are there, you will see mass brands spending significantly. Advertisers will spend Rs 500-600 crore incrementally during this period. Some brands will buy high-value sponsorship while some will buy impact. News will get a lot of additional investments,” the CEO said, requesting not to be named.
Unlike other state assembly elections which see interest among audiences in a specific region, the UP elections are expected to draw audiences from across India due to its impact on the national electoral politics. “West Bengal election was interesting because while it was a state election there was national interest. Same thing is happening with UP. While it is a state election there is a lot of interest nationally. From that perspective, brands leverage that opportunity for higher visibility,” the CEO noted.
Zee Media Chief Revenue Officer (CRO) Manoj Jagyasi is expecting a 20-25% upswing in ad spends for the assembly elections. “The political arena is tough and like brands, political parties & personalities have to make their equity while generating the buzz & heard. The cost of acquisition of brand equity has to be investment friendly. Expectations from this year's elections are huge and at least a 20 to 25% upward swing is expected.”
Jagyasi called the UP elections as the Kumbh Mela for the news genre which comes once in every 5 years. He added that almost all the programming is getting skewed towards UP. “The peak is yet to occur, and it is going to be big this year – a feat which can only be matched by the 2024 general elections, is my gut feel,” he averred.
ABP Network Chief Revenue Officer Mona Jain is gung-ho about the assembly elections since ABP is among the few news networks that has dedicated news channels for election bound states like UP and Uttarakhand (ABP Ganga), Punjab (ABP Sanjha), and Goa (ABP Majha). ABP News has a national footprint.
“We have news channels in every election-bound state. Hence, we are well positioned to reach out to a diverse set of audience with our unique election programming. As a result, the advertisers have recognized the value we bring to the table, and this helps us in leveraging our position,” Jain asserted.
Like 2017, when political parties had reportedly spent Rs 600-900 crore on UP elections, Jain expects similar spends across online and offline media formats. “I see similar spends across media formats in similar intensity. Both offline and digital platforms will be used equally,” she said in response to a question about the quantum of media investments by political parties just in UP elections. “As always there will be substantial advertising spends – it’s a serious election and one can see competition heating up and each party will run their campaign to garner share of voice.”
News Nation Network President - Sales and Marketing Abhay Ojha believes that the political parties will increase their spending by 20-25% in 2022 in comparison to 2017. “Based on our assumption and calculations, it seems like this election may see 20 to 25% growth in terms of media spends by political parties, this growth would have been higher had there been no covid and lockdown.”
He also expects ad spending by corporate and retail advertisers to go up by 10-15%. “This election, corporate and retail advertisers would also increase their ad spends by 10 to 15%.”
UP and Punjab will drive growth for news
The revenue heads of ABP, News Nation, and Zee Media concur that UP will drive ad revenue for the news category. However, other states like Punjab, Goa, Uttarakhand and Manipur will get their share of ad spends.
Ojha stated that UP followed by Punjab will be the key drivers of viewership and advertising growth for the news genre. “UP market contributes about 15% of total Hindi news viewership and has a population of 200 million, hence UP will be a key market along with Punjab as this state also plays an important role in national politics. Smaller states like Goa, Manipur and Uttarakhand will have smaller share of ad spends.”
ABP Network’s Jain states that Punjab, Goa, Uttarakhand, and Manipur will see ad spends requisite to their size. “These states too will spend money to reach out to their markets and will make requisite spends required for their regions.”
Jagyasi asserts that the ad spends for all the five states will see a significant jump in 2022 compared to 2017. “Not to the tune of UP, yet each state would surely see an upswing over the last elections. The competition is getting tougher with each term and to reach the heart and minds of the people, a continuous hammering for recall is a must and this does not come cheap.”
Which medium will gain the most?
Jain stated that all the media formats be it TV, print, digital, radio, and outdoor will get their share of ad spends. “All mediums will get their share of spends – each vehicle plays a specific and distinctive role of creating visibility and momentum for campaigns and will be used in equal measure. Parties will be looking at cumulative impact by using a combination of them.”
Ojha believes that news broadcasters will get disproportionately high amounts of ad spends compared to other mediums. “TV will get more as it’s a visual media and has the highest mass reach followed by print, digital radio and outdoor. While broadcast TV will lead the pack, advertising across digital channels will continue to show significant growth.”
Jagyasi pointed out that political ad spends are usually 360 degrees and parties make a great use of all the media vehicles without restricting themselves to a print or a TV-only campaign. “The equation differs from an independent to a party candidate and parties tend to behave like large corporates making good use of TV, digital and local platforms like print, outdoor and radio,” he added.
Will TV news rating blackout impact ad growth?
The news broadcasters assert that the absence of news viewership data will not impact their growth prospects since advertisers cannot ignore a high-reach medium like TV and most of the news channels are legacy brands with a loyal viewership base.
Says Jain, “Absence of rating largely is not hurting as it's business as usual. Some advertisers or categories who are data sensitive are little cautious and may have reduced spends, but the majority of advertisers historically are aware that election period sees a huge shift of viewership to news genre, and it becomes an effective and an efficient platform to reach to their consumers."
Jagyasi asserts that legacy brands will not face any challenges due to rating blackout. “The legacy of several years in the broadcasting business while leading the way all through for others to follow, it is imbibed in our DNA to serve content like no other, hence I don’t see a problem for an established and credible brand Like Zee Media.”
Ojha stated that News Nation has always focused on content innovation and engagement as a selling proposition, hence the network is hopeful of its growth prospects despite the absence of news data.
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