As ad volumes on TV tick up, broadcasters hopeful revenues too will follow soon

Most prominent players believe the industry will bounce back in two-three months

e4m by Sonam Saini
Updated: Jun 3, 2020 11:45 AM

For the television industry, which went through a tough time during the COVID crisis, Week 20 (BARC-Nielsen report) has brought in positive signs. The ad volumes went up by 16 per cent, even though it is still 23 per cent lower than the pre-pandemic period. And with the ad volumes moving in the upward direction, there are hopes that the rates and revenues too will follow soon.

Ashish Sehgal, Chief Growth Officer, Advertisement Revenue, ZEEL, believes the situation will start improving from July and the industry should be back to its original volumes by October.

"May last week was slightly better (in ad volumes) than the first three weeks, and I believe June will be a better month than the previous one. Ad volume is definitely growing, but we dont know if it will reach the previous level. In the COVID  period, the volume went down by 25-30 per cent. Hopefully, it will improve from that level. But will it come back to 100 per cent?  I don’t think so. We believe that from July, there should be a better uptake. My estimate is that by October, we should be back to our original volumes,” Sehgal explains. 

The easing of the lockdown has brought on board many new advertisers. This week, the total advertisers count on TV increased by 3 per cent to 1370, compared to 1331 in Week 18. Vivo, Cadbury, Kia Motors, Faasos, Bajaj, Sharp India, Hoichoi and Apple were some of the new advertisers in the last two weeks.

Though broadcasters did see a fall in revenues because of fall in ad rates during the lockdown phase, the industy is hopefull that the fall is short-termed and once the clients are back and the environment improves, all mediums, including print, radio and digital, will bounce back in two-three months.  

According to Pawan Jailkhani, Chief Revenue Officer of 9X Media, the number of clients are increasing and the ad volumes have also gone up in the last two weeks and there will be a substantial increase in the month of June as well.  He however adds the ad volume doesn’t talk about the health of the industry. "In the last 2-2.5 months, the rates have gone down across media platforms. We have compromised on rates, so even if the ad volume is growing, it is not really converting into a good value,” says Jailkhani.

"There are multiple factors for the decline in rates. For instance, the  flagship genre GECs were on a repeat and there was no fresh content available. Hence, the GRPs have come down. But genres such as movies, music and news have done better and their GRPs were better,” he explains. 

Talking futher about the bad phase, Jailkhani says it was an unprecedented time and clients too were under pressure because there was no supply and sales were zero for some of the advertisers. However, agencies were doing a great job in terms of selling multiple options to clients.

During COVID-19, total TV consumption was at an all-time high; up to 40 per cent. Though this has started declining now, it is still higher than the pre-COVID period. TV consumption was at an all-time high, but advertising was all the time low during this period. This impacted broadcasters' revenues. According to some media planners, GEC saw the highest drop in ad rates; it saw a decline of around 60-70 per cent. News genre recorded 20-30 per cent decline, music witnessed a fall of 30-40 per cent and movies 20-25 per cent.  

Speaking about the rates, Sehgal shares, “We did not change the pricing. There were some discounts or offerings which we had proposed to the clients during this period, which we will start to slowly take away once the normalcy comes back in total ad volumes.”

Another media planner, on the condition of anonymity, informs that every network is giving a bonus. "So basically, whoever is investing more money is getting more benefit. Some advertisers are getting almost 40-50 per cent bonus and some are getting 20 per cent of whatever rate was applicable before the COVID period,” he says.

Like rest of the industry, Dinesh Singh Rathore, CEO, Madison Media Omega, too is hopeful that the increase in ad volumes will surely translate into an increase in rates and revenues. What is making Rathore more positive is the impending festival season.

"New clients are coming up, which means revenue will also increase. Government has given some relaxation, lots of shops are open now and are allowed to conduct business. We will see an increase in volumes week on week. The rate has gone down post COVID because there were no takers in the lockdown. It is a supply-and-demand game. As of now there is a supply, so rates will be down. And when inventory starts getting filled up, the rates will continue to rise,” he explains. 

According to Rathore, April was the worst month for advertising, and May was slightly better. He is confident June will be much better than May. “There are a lot of festivals coming. This year, Diwali is in November. So we will have a longer festive period between Dussehra and Diwali. I believe things will move positively,” he opines.

For more updates, be socially connected with us on
WhatsApp, Instagram, LinkedIn, Twitter, Facebook & Youtube