What drove TV ad volume in Jan-March 2021?
Industry experts opine that multiple factors — from pricing to improved consumer sentiments — may be responsible for 2021 starting out on a good note for TV advertising
The television ecosystem, it seems, has emerged unscathed by the grim present-day situation. With the January-March period witnessing 456 million seconds of ad volume — highest since 2018 — 2021 has begun on a good note for advertising on TV.
As per the Broadcast Audience Research Council (BARC) India data on ad volumes, there was a sizeable growth in ad volume across all genres with news witnessing the highest growth of 25% followed by GECs with 21% and Movies with 23%.
"March data reinforces what we at BARC India observed during Jan and Feb of this year – that TV Ad Volumes have picked up the pace and are progressively registering all-time high levels. This is indeed an encouraging sign for the industry and all the more so since the growth in volumes is driven not by a limited set of advertisers, but from those across the spectrum," said, Aaditya Pathak, Head – Client Partnership & Revenue Function, BARC India.
The media experts believe that multiple factors have driven the growth in ad volume -- pricing, overall improved sentiments among the consumers, and advertisers exhausting their left budgets before the end of the financial year.
"January to March in 2021 has seen not only better volumes as compared to the same period last year but also an overall price correction. We saw the lowest number of COVID cases in the country between January and March, which boosted consumer sentiment. Each brand had actively started spending on communications to enhance growth. The broadcasting ecosystem saw close to 5% overall growth in revenue between January and March 2021," Ashish Sehgal, Chief Growth Officer – Advertisement Revenue, ZEEL.
According to the latest TAM AdEx Advertising Report for January-March 2021, the advertising volume on television has grown by 30% compared to the same period of last year. The report noted that in the span of the previous six months, television ad volumes peaked in March '21.
Adding to Sehgal's statement, 9X Media Group's outgoing chief revenue officer Pawan Jailkhani explained that the overall volume grew because the decline in COVID cases from December onwards improved consumer sentiments. Another factor is that, around IPL last year, advertisers didn't buy other channels during October-November, which spent later during Jan-March. The advertisers that didn't advertise the previous year (April-December' 20) have also spent on advertising over the last three months. Jailkhani shared, "The ad volume also grew because of discounting within the channels. However, even if the volume grew, I don't know whether the value was substantial compared to 2018 and 2019. I believe revenue on TV increased compared to JFM 2020 versus JFM 2021 by around 5-6%."
According to the TAM report, among the leading sectors on television, Food & Beverages topped with a 20% share of ad volumes, displacing Personal Care/Personal Hygiene, which was on the top during Jan-Mar'20. Services, Household Products and Personal Healthcare, were among the top five sectors. Moreover, the top three sectors added a 51% share of ad volumes, which were also among the top three during Jan-Mar'20.
"People may not be going for electronics, but they are buying FMCGs products. FMCGs advertising is up in a big way and is causing a significant spike. Also, FMCGs are traditionally low-cost inventory, hence leading growth in overall volume," shared Siddharth Anil Chopra, Revenue Head, Goldmine Telefilms. He said during the pandemic, FMCGs is the only sector where consumers didn't stop buying products.
Chopra further added, "Hindi movie channels' volume is 14-15% higher than the last year, but the revenue hasn't grown that much. Advertisers have held back their spending the entire year, hoping that things will get better, and by the end of the year, they need to spend so they can get higher budgets for the following year. Hence the inventory was up."
On the news category, which saw the highest growth in ad volumes, Gaurav Dhawan, EVP - Revenue, Times Network said, “With the Covid impact stabilizing in JFM, most businesses were coming back to normalcy and this reflected in ad volume restoration. Besides, National events including the Union budget and State Elections drove additional FCT volume, thereby making News the preferred genre. However, the second wave is a dampener. While it has not yet impacted our volumes, we are concerned about how May will turn out for the category.”
Giving his perspective around pricing, Karan Taurani, VP, Elara Capital explained told that pricing still under pressure for most of the channels. "There was no need to increase the inventory if the pricing was growing, but these are times wherein pricing is still at a decline for some properties, whereas for some, it's at par. While for key properties like IPL, it's at a peak. Pricing is not coming back is the measure reason why there is growth in the inventory," said Taurani.
He further explained that the inventory growth coupled with many factors, including the channels that have moved from pay to FTA, and were also some new channel launches. "On the news channel, we have seen massive growth in inventory—Edu-tech, ecom, and FMCGs and to some extent BFSI are the main categories for TV advertising.
As per the BARC Data for Jan- March'21, the Ecom sector continued to show healthy growth of 13% compared with the same period in 2020. Also, Digital-native brands under education (3x growth), Pharma/Health Care (7x growth) and BFSI (55% Growth) categories continue to propel the growth of the ECOM sector in Jan to March 2021 versus 2020.
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