By Shripad Kulkarni
Why and how TV was decoded
Coming on the back of the India adspends degrowth in 2019 second half, the pandemic dealt a big blow to advertising. Undoubtedly, print bore the brunt of the C-19 impact, followed by Radio. Digital has had a field day, in terms of media consumption and e-commerce.
Digital Spends too have got a good boost, but it will take some time to translate the digital consumption into a commensurate huge spike in paid media. On the other hand, at about 37% of Total Spends, Television is pretty much the mainstay. The massive rise in News Viewership saw a commensurate thrust on the News Genre from Advertisers. In Aug-Oct, IPL led a bounceback to get the advertising on a much better wicket. Live Telecast of IPL, in many ways has helped in the kickstart of advertising during festive. So, decoding TV-led bounceback helps us understand many facets of Indian advertising. While we will look at the spends trend based on prevailing rates during the various pandemic phases, ad volumes help in a detailed understanding of the strategies deployed.
However, care has to be taken to do a like-to-like comparison. So, IPL of 2019 to be compared with IPL 2020 (though it was in festive). And general entertainment/news separately for same period.
Look out for an interview with the author and veteran mediaperson on Thursday, December 10.
I have looked at Average Monthly Commercial Airtime by Key Channel Genres. We looked at the top-rated channels in each genre as a group, which contribute to 75-85% genre revenue. So, Genres detailed are: Top 4 Hin GEC1 channels, next 4 Hin GEC2, 6 Hin Mov, 6 Hin News, 4 E News, 12 Reg News, 5 Eng Mov, and 15 Regional Channels of South, Marathi and Bengali. The Balance are grouped as Long Tail. 10 months of 2020 are compared with the corresponding period of 2018 and 2019.Till October 30, 50 IPL matches were completed, so IPL is compared with 50 matches of 2019
Summary of the findings
1. IPL – a grand marketing success
IPL was a grand success, not just as an event, where BCCI showed exemplary guts and execution, but also of the Disney Star AdSales team. That’s because you have to pre-sell an event like IPL. And, at a 5% additional airtime in live, at a premium over last year is a fantastic performance which kick started the advertising rebound. I estimate IPL to have got a 12% Revenue increase over last year.
2. The rebound was driven by E-com, BFSI and Healthcare
IPL as well as News and General entertainment both were driven by these categories.
It looks like the new economy will have to use offline media for the top of the funnel
So, BFSI and the New economy brands will continue to be the drivers for next couple of years.
3. Jan-Oct TV ad revenue shrunk by just 19%, due to the rebound
As we know, in Apr-Jun 2020, there was a big drop in adspends. Listed companies Zee Entertainment, Sun TV and TV18 reported a whopping 60% average drop in revenue, while TV Today reported a 35% drop (over same period LY). By Jul-Sepm this drop was reduced to about 26% for the GEC Groups while TV Today bounced back to last year’s revenue level. Studying the average rate trends across the Pandemic phases of Apr-May, June-July and Aug-Oct, we estimate that the TV Spends, in fact have dropped by a significant 19% so far – which is a good rebound considering we were staring at a minimum 40% drop in ad revenue!
4. Long tail of Advertisers has to wag for Advertising to grow
Just 27 top advertisers contribute to 50% Commercial airtime and just under 500 Advertisers contribute to 90%. We have a long way to go to realise the potential of India. We need a significant no of advertisers from the long tail to move up and graduate to big advertisers. The process has started. Even in this period, over 1200 insignificant advertisers moved to being significant. This was largely, on the back of news and Hindi/regional channels.
5. Long tail of Channel Genres will shrink
Today the long tail contributes to a whopping 81% of Airtime and 23% revenue.
The Revenue of the Long tail, however has dropped by 32%, with English dropping by over 50%
6. Amul and Dabur have shown the Industry how to make the best of a crisis
Both Amul and Dabur, our homegrown Master Brands went aggressively promoting many more brands than last two years and growing their commercial airtime by a whopping 125%.
The other day I was chatting up with a Maruti Suzuki Nexa dealer. Post the expected lament on lack of footfalls and the still elusive operating profit, we got into discussing the basic Nexa model – the purpose, the promise and the delivery. After a lot of soul-searching and head scratching, he finally brought it down to the wooden flooring, fancy furniture and focused lighting as the “premium” experience being offered to a customer vis-à-vis one who walked into a Maruti Suzuki Arena!
Two weekends ago, Avengers: Endgame released in India as easily the most-anticipated Hollywood film ever. At a staggering 52 Cr+ business on the first day (net of GST), the film beat the record of the previous film in the franchise (Avengers: Infinity War) by a wide 60% margin. Not only that, it beat the biggest Hindi opener till date too, surpassing the opening-day collections of Thugs Of Hindostan, without having the benefit of a huge nationwide holiday like the Aamir Khan film.
Avengers: Endgame is on course to do 375-400 Cr business in India, which will beat the lifetime box office record held by Avengers: Infinity War by about 150 Cr. Normally, such records are broken after a gap of a few years, because ticket rates go up and new multiplexes open up, giving films a wider number to achieve on the same demand. But that’s not the case in the Avengers example. The market scenario is largely similar to last year, barring a reduction in GST on movie tickets. A steep 150-Cr growth in just 12 months clearly highlights the growing equity and stature of brand Marvel in India.
