Sports broadcasters eye big business in H2 as industry expects Rs 4000-4500 cr ad spends

With back-to-back sporting properties lined up, sports broadcasters Star Sports and Sony Pictures Sports Networks might corner a significant chunk of ad spends on TV in the second half of 2021. The busy sports calendar began with UEFA Euro 2021 in June, followed by Tokyo Olympics and India-England series in July. The biggest sporting properties - the second half of Indian Premier League (IPL) 2021 and ICC T20 World Cup - will take place closer to the festive season and are expected to take away a lion's share of media spends on sports.

According to industry estimates, advertisers might pump in Rs 4000-4500 crore on sporting properties on TV as well as digital. Between second half of IPL and T20 WC, Star Sports is estimated to earn upwards of Rs 2500 crore. The rest of the ad monies will be divided between properties like India-England series, India-Sri Lanka series, UEFA Euro 2020 and Olympics.

“The ad spends on sports will be roughly Rs 3,500 crore on TV between June and December. IPL and ICC T20 WC will take away a large chunk of this, while other properties are expected to make Rs 700-750 crore. There is buoyancy in the ad market for all genres and not just sports. The big thing is that there is money in the market,” said a senior official from a leading TV broadcast network.

Rammohan Sundaram, Country Head & Managing Partner – Integrated Media, DDB Mudra Group, said AdEx is a reflection of consumer sentiments, retail consumption, brand positioning and overall economy at large. He also said that the second half has many sporting events falling right in the festive period when the sentiments are positive.

“Typically sentiments are at their very best during festivals in India, which is when purchases are considered auspicious. Hence, I see that adding to the firepower for advertising and media. If you compare YTD to that of last year H2, we will definitely see a lot more investments on television given we now have close to 50% of the population vaccinated, fear of Covid-19 is diminishing, and country is well-prepared for any eventualities. All of these aspects do add to overall consumer sentiments which will mean a lot more positivity and hence growth,” he stated.

Sundaram noted that H2 will be a lot better than H1 with sports playing a big role in bringing buoyancy back in the market. “IPL is now the primary religion in the country. Cricket has always seen Indians show passion and emotion, and that is not going to taper anytime soon. With the proliferation of addressable audience increasing across touchpoints, there will be a big fillip to overall AdEx. However, you must remember that had the IPL concluded in May this year, we would have seen a lot better result. But the pandemic played havoc and so monies moving into H2 automatically will have a big positive impact on AdEx,” Sundaram said.

He also agrees that the media spends on sports might touch Rs 4000 crore. “This is highly likely given the money that was invested on IPL continues to be booked and there nothing much left with TV or Digital on Star. Then we have more cricket action with some marquee events, so I think it will be in this range of Rs 4000 crore.”

Vinay Hegde, Chief Buying Officer, Madison Media, said that the second half of 2021 looks buoyant due to the vaccination drive, ease in lockdown restrictions and the return of subdued categories along with the usual spenders.

“The second half has 2 of the biggest cricketing events lined up, the balance of IPL and the T20 WC, which is bound to ride the positive sentiment. Advertiser interest in most of these events is very high considering that quite a few events are in the midst of the Indian festival period and brands would be looking for high octane impact options to ride on. Especially, given the current scenario which indicates that demand > supply when it comes to regular inventory,” he added.

Sports, he said, will attract a bulk of the advertising budget, but for categories where this genre makes a difference. “Other categories will invest on other impact shows as also on regular inventory in all probability at some price inflation considering the high demand. IPL and WC will corner bulk of the sports monies and a fair estimate would be that approximate 4000-4500 crores will be on the back of sporting events across TV and digital.”

According to Hegde, the AdEx in the second half will also get boosted by the presence of entertainment properties like Kaun Banega Crorepati (KBC), India's Got Talent (IGT), and Bigg Boss across languages. “There could be more than just the presence of sporting properties that will give the necessary boost to the AdEx in the second half. Without an iota of doubt, these big events will give the necessary fillip, but the broadcasters have definitely upped the ante and there are a slew of other entertainment impacts which will add to the AdEx. KBC, IGT, Bigg Boss (Hindi, Marathi, Telugu, Tamil, Kannada) and many more are on the table and advertisers are looking to bank on these during what is a key period for advertisers.”

He believes that categories like durables are getting very active now, as they missed their key season in AMJ due to the second wave. He also foresees aggressive rate hikes by the broadcasters to make up for the lack of ad rate growth in the last 18-24 months.

“Advertisers are also keen on investing on these to secure inventory, which is limited. Categories like FMCG, Auto, e-com will continue to lead this demand charge. The other reason could be that the broadcasters and publishers have struggled to get their rates over the last 18 to 24 months, starting right from the economic slowdown followed by the first and second Covid-19 waves. In quite a few cases, they will now leverage the demand situation to justify price escalation and in all probability we may see a much higher inflation kick in the second half, especially during festive. This will of course mean addition to AdEx due to inflation as well,” Hegde expounded.

Jigar Rambhia, National Director - Sports, Wavemaker India, pointed out that sports is coming back strongly after a gap of 1.5 years. He highlighted that the Olympics got many advertisers, and the India-Sri Lanka cricket series was fully sold out. “SPSN did a decent enough job to get a lot of sponsors on-board. There is a lot of anticipation for the India-England clash as well, as the Indian team has been doing well in test matches. Advertisers' interest is very high. Then we have two of the largest sports events, IPL and World Cup, coming up. They will be played during the festive period and I believe both properties will do well.”

On the IPL and T20 WC taking place back to back, Rambhia believes that both the properties will complement each other rather than eating into each other's ad share. “This is not the first time that two marquee events are happening one after the other. Two years back in 2019, the World Cup was played right after the IPL. I don't think ad spends for either of the properties will get affected. A similar thing happened in the 2015 World Cup. Brands have now evolved, and they know what will work best for them. Brands that are focusing on IPL will continue to do so, and the same goes for those focusing on the World Cup,” he elucidated.

Rambhia noted that the media spends on sports continue to be driven by cricket. “Overall, there would be an increase in spends from the cricket point of view, but from the non-cricket side, there isn't anything happening for it to get an increase or even get to the earlier levels.”

Niti Kumar, Chief Operating Officer, Starcom India, feels that the sports genre will see growth because many sporting events like the World Cup or Olympics had to be moved to 2021. “The whole second half has back-to-back sports opportunities available for brands. Often, the growth would be dependent on the availability of these tournaments at the right time for the brand campaign. But now brands have some option anytime in the second half that they are advertising. There would be growth essentially because of the volume of these available tournaments,” she stated.

With the second half of IPL getting shifted to September-October, advertisers will have the option to pick and choose between IPL and ICC T20 WC. “For most of the advertisers, it will be a case of either/or. There will be few advertisers whose budgets will allow them to pick up both the properties. Selecting the property would also depend on multiple factors, including the timing of the brand's activity. For instance, IPL gives a good run because it continues for a whole festive period. Additionally, in terms of consistency of ratings, IPL tends to be slightly better than the World Cup because the non- India matches don't tend to rate that well,” Kumar added.

Anand Yalvigi, Director, dentsu India | Dentsu Sports Asia, said that the TV ad spends will be humongous because the IPL and ICC T20 WC are properties with massive viewership. “With IPL and ICC T20 WC happening back-to-back, it's a bonanza for sponsors as well as the broadcaster. A lot of ad spends will shift to cricket, particularly since IPL and ICC T20 WC are happening back to back. India-Sri Lanka as well as the India-England bilateral series have done well. UEFA Euro and Olympics have their own niche audience and therefore, attract brands that target more evolved consumers.”