An intense war for IPL advertising revenues between the television and media rights holders – Star Sports and JioCinema – is proving to be a deterrent for many advertisers, said highly placed industry sources.
“The way things are playing out, many advertisers would not want to get into this slugfest or be seen taking a side and hence may exit. Many of my clients have said no to IPL advertising for this reason. And this is a big loss to the great property and the industry, in particular, television,” a top media planner told BestMediaInfo.com.
The television rights holder of the tournament has already signed advertising deals worth Rs 2,000 crore and is expecting another Rs 1,000 crore in the next two months, the media planner said, adding that it is in stark contrast to the Media Partners Asia (MPA) report predicting Star Sports revenues from IPL falling to Rs 1,800 crore in 2023 from Rs 3,600 crore in the previous season.
Star India had set a target of Rs 4,000 crore on the basis of last year’s ad sales.
“With the exit of new-age clients, Star will certainly miss the target at least by 20-25%. On a highly optimistic note, they may clock a revenue from advertising in the range of Rs 3,000-3,300 crore for the upcoming season and a 10% shortfall from the last year was expected looking at the macro-economic conditions,” said an agency head.
Talking about how digital advertising is playing out with Reliance-owned Viacom18 holding digital media rights for IPL, the agency head said, “JioCinema is doing well when it comes to aggressive marketing and selling but it is not likely to overtake television, at least for the next two to three years.”
Elara Capital’s Karan Taurani told ET Now Swadesh on Wednesday that digital’s share in IPL revenue could go up from 25% to 30-35%.
“The major reason for this increase is that the tournament has been made free on JioCinema. Sports is a very compelling genre and people like to enjoy matches on large screens. If smart TV numbers are just 15% of the entire TV household, it would be difficult to bring big numbers when it comes to ad revenue. People watch games on mobile but that’s not consistent and hence the time spent is very low compared to television,” said Taurani.
“If there is any threat to the TV from digital, it would come after three to five years as TV continues to offer strong mass proposition,” Taurani added.
The divide between TV and digital rights has left advertisers confused and they are picking the medium as per their budgets.
“In my fraternity, I haven’t heard of anyone who is moving from either digital to TV or vice-versa. The split is more or less similar to previous years. For Jio, the new advertisers will be the key. India as a market will take time to mature when it comes to the connected TV. Most of the connected TV homes in India have both DTH/Cable and broadband connections. As marketers, we are not sure where the viewer will watch the games given that there would be a delay of a few seconds on the connected TV,” said a large advertiser who has business interests in Jio platforms and hence requested anonymity.
The largest share of advertising on both digital and television mediums for IPL comes from GroupM agencies. At the same time, IPG Mediabrands handles television advertising on par with GroupM.
Highly placed sources in GroupM told BestMediaInfo.com that they do not share numbers as a part of their company policy but said that the split between both mediums is largely the same as last year.
Dentsu India and Publicis Media agencies handle a significant portion of digital advertising for IPL.
Upon being asked about a ballpark figure, an industry veteran told BestMediaInfo.com that all the top four agencies put together have booked digital inventories in the region of Rs 700-750 crore so far with GroupM alone buying one-third of the inventories on JioCinema.
“My estimate is that many advertisers would invest further on digital advertising depending on the response and experience and if all goes well, this number could double by the end of the season,” said the veteran.