You could pardon the folks in the advertising business if you spot a spring in their step. Year 2019, by the looks of it, could well be the biggest year of media spend and not without reason. There are three mega events, which alone could see advertisers cough up a handy Rs.90 billion (see: Ringing cash registers). And if you consider that the general elections, Indian Premier League (IPL) season and the ICC Cricket World Cup will be held in a span of four months, one is in for a blitzkrieg.
IPL and the cricket World Cup come together every four years. In fact, the last biggest ad-spend bonanza, of Rs.25 billion, was in 2015 when they did. But this year, there is the election jamboree too and the stakes have become much higher leading to a surge in money being spent. This time, digital media too is a serious player and especially with political parties. Half of their Rs.50-billion election spend is expected to go to digital advertising.
That’s not all. There is action on new launches, with passenger cars being right on top of the heap. Starting with Maruti Suzuki and Hyundai, with around eight and four new models respectively, one will also see the entry of Kia Motors, which will roll out at least three of its models.
In all, at least 30 car launches, a mix of new and variants to existing models, will be on the roads. Inevitably, this will contribute in no small measure to the media spend, given the top brands cumulatively spend no less than Rs.10 billion each year on advertising and promotion. In 2018 too, the splurge was between Rs.10 billion and Rs.12 billion. Add to these, the multitude of mobile handset manufacturers spending large amounts just to be heard, and the story on why 2019 could be such a high-decibel year becomes quite clear.
The spoils
Each of the events gives an opportunity to reach out to a different target audience, which, creates a larger base of advertisers. For instance, the viewership for the general elections is largely male-centric and will bring in advertisers who cannot afford to be there on the IPL. This would mean ads for mobile handsets, automobiles, and food delivery aggregators at the national level. With a multitude of channels across India covering the elections at various stages, it also brings in a host of regional advertisers looking only for a particular state, for instance.
As things stand, some of the larger television networks are asking for Rs.30-Rs.50 million for a full sponsorship package, which includes free commercial time over a 45-day period. Taking a 10-second spot on counting day, when viewership peaks, could cost as much as Rs.250,000. On regular days, news channels charge Rs.25,000-Rs.30,000 for the same.
That still remains the most affordable proposition; cricket is way more pricey. Last year, Star India was asking for Rs.950,000 for a 10-second spot on the IPL. That has been raised by 25-30% to over Rs.1.18 million, making it the most expensive show on television to be on. Peak rates are for the final at Rs.1.5 million for a 10-second spot.
Chinese smartphone brand, Vivo, bought over the title sponsorship for the IPL in 2018 for a five-year period for a jaw dropping Rs.22 billion, confirming the high interest levels for this marquee 20-over format which is organised every April and May. Even by the most conservative analysis, as much as Rs.20 billion will be spent during the IPL on mass media alone, which does not include sponsorship in any form — be it title, associate or what is spent inside the stadium by way of ground rights or the boundary boards. With studies now indicating that IPL attracts a healthy mix of viewership across genders, it becomes an extremely attractive audience group for the advertiser. Across media formats, 700 million watched IPL 2018 and the number grows every year.
Nipun Marya, director - brand strategy, Vivo India, points out that India is the second largest market for mobile phones and the reason for him being there is to create awareness for his brand. Vivo typically launches two models spread across the first and second half of each year. This year, it was the Vivo V15 Pro, priced at just under Rs.30,000. “For us, the IPL provides the initial push for the brand, based on which we will draw up a strategy for the World Cup,” he says. At the last IPL, the company used the same tack with the V9 Pro, which, according to research, resulted in 70% awareness for the brand. “This year, over 50% of our media spend will be on television,” he adds.
Mobile handset manufacturers will alone drive the story this year, with those in the business estimating it will account for close to half the media spend. Joining Vivo will be its other brands, Oppo and OnePlus, in addition to competition such as Samsung, Xiaomi and Nokia, in what promises to be an intense battle. Automobiles, especially passenger cars, are not too far behind. Puneet Anand, group head (marketing), Hyundai Motor India, says his company will have four launches, with the first half blocked for the sub-four metre SUV and an electric SUV.
Interestingly, it’s not all about cricket for Hyundai, with the company having inked one-year deals with both India Today TV and Times Now, with a clear eye on the elections. While there are no official figures given on this spend, industry experts estimate it at Rs.40 million to Rs.50 million for each media house. According to him, it made sense simply because an additional outgo of 30% outside the three-month election window, gave him a deal for the full year. That means a footprint on Times Now’s prime time show, India Today TV and the India Today Conclave. “Election-related coverage reaches out to a very specific audience and we will augment that with other opportunities in cricket,” explains Anand. In the current India-Australia series, Hyundai has picked up the rights for the pitch logo for an estimated Rs.45 million to Rs.50 million per match and, for the big tournaments coming up, it may well put a large part of its money on spot advertising and some on-ground presence such as boundary boards for Rs.3.5 million to Rs. 4 million per match.
Other spend propellers
The IPL is the most expensive place to host your brand, with even the World Cup being marginally cheaper at Rs.800,000 to Rs.900,000 for a 10-second spot. Viewership interest in the latter will still be tilted towards matches where India plays, with the IPL drawing maximum eyeballs since team loyalties are not as intense as it is for an India match. Those kind of rates keep many an advertiser at bay — some who just can’t afford it and others who are not entirely convinced of its worth.
Mayank Shah, category head, Parle Products, remains sceptical of the IPL delivering on RoI (return on investment). “Being there means a good part of my budget is taken away. While IPL is good for urban consumers, we have seen how viewership has dropped in rural and Hindi-speaking markets,” he explains. With his products consumed in large quantities in rural India, the situation becomes quite tricky. According to him, it will have to be a pick and choose strategy for cricket and mix that up with a presence on general entertainment channels (GECs), where it will be Rs.250,000 for 10 seconds at the top end. “Of course, the reach will be limited but the RoI equation works. Besides, in the midst of so much cricket, GECs will have to drop their rates (by approximately 30% at the higher end for large advertisers and 10-15% for mid-sized advertisers) and that could present some interesting opportunities,” he says.
The advertising revenue pie has changed drastically. It is most clearly visible in digital’s share, which stands at over 15%, twice as much as it had in 2014. It is forecast to hit 20% this year. If the 2014 general elections — a big one then for the way digital was used by political parties — is taken as the base year, spend on digital has moved then from Rs.34 billion to an estimated Rs.160 billion this year. The larger share of this will come from handset and passenger car manufacturers. For Maruti, the digital spend is 30% of the overall media budget and, for Hyundai, it is 15-20%. This emphasis on digital ads has been significantly propelled by Jio, launched in September 2016, making data more affordable.
Rajiv Dingra, founder and CEO, WATConsult, a digital and social media agency, points out that digital gives the advertiser flexibility to look at other ways to communicate. Historically, television has been constrained by the number of seconds one could be on air. “Today, it is quite normal to have a digital campaign running for a minute and in some cases even four minutes,” he says. His agency’s digital campaign called Mein Se Hum, for SBI Life Insurance with cricketer, Cheteshwar Pujara, went on air late last year, with a running time of over two minutes and reached more than eight million people. There is a television commercial too, but only for 45 seconds with a different communication. In terms of costs, a brand will have to spend Rs.4 per view on YouTube and Rs.2.5 on Facebook — if the target is five million views on YouTube, the cost will be Rs.20 million. Hyundai, to celebrate 20 years of being in India, unveiled its Brilliant Moments campaign (some of them were over four minutes) last year. The company’s research indicated that in all there were over 200 million views (not unique) with an 18% increase in purchase intent.
Anand says, digital does not always need a theme unlike product advertising on television. Star has a lot riding with its digital platform Hotstar alone charging Rs.200 million for associate sponsorship for the World Cup. The series is expected to bring in Rs.20 billion, on the higher side, to its kitty.
For this year’s elections, there is little doubt about the significance of digital media. According to Naresh Gupta, co-founder, Bang In The Middle, an independent creative agency, product advertising needs a context, while political parties look for reach and engagement. “Digital advertising provides that ability to reach a large audience at one go. There is a very good chance that political parties will use the IPL this year just for this reason,” he says. Digital viewership for IPL was over 200 million in 2018, while television viewership for the season was 500 million. Star’s Hotstar platform got on to IPL for the first time in 2015 and had 41 million viewers, which two years later grew to 130 million. IPL on television in 2017 had 410 million.
Gupta estimates large brands will still have a limited presence on election-related coverage, barring the 10-day window, closer to the counting day. Media planners suggest that election spend this year alone will be upwards of Rs.50 billion, compared to Rs.25 billion in 2014. This will include the cost of rallies as well, with mass media spend expected to be no less than Rs.40 billion. In 2014, digital was 20% of the total money spent and that will be at least 2x more, which will surely include the three to four-minute poll pitch across the internet and perhaps one’s mobile as well.
From an advertiser’s point of view, there is a way to segment the news audience as well. Amit Tiwari, vice president (marketing), Havells, maintains there is a case to go deeper into regional markets. “News channels across languages are uniquely different with a sizeable audience to reach out, within each state. An advertiser can, for instance, look to be in only one part of a state if his brand has a strong presence there,” he says. For all the hoopla around advertising spend this year, Tiwari sounds a word of caution. “The advertiser is spoilt for choice but will have to look beyond the hype since a disproportionate sum of money will be spent in the first half. Getting it right means a high level of scenario planning, (where advertiser/agency evaluates consumer viewing pattern across mediums and prepares various plan options to optimise campaign objectives), which is not easy at a time like this,” he warns. Clearly, no script is ever perfect.
