Sports broadcasters to take home Rs 3 bn less in ad rev this year

MUMBAI: The absence of the cricket World Cup, a less heavy calendar for Dhoni and his boys and the uncertainty over the Indian team‘s future performance could result in ad revenue for the sports broadcasters trimming by around Rs 3 billion in 2012.

Sports broadcasters earned an ad revenue of Rs 20 billion in 2011 calendar year, triggered by the Indian Premier League (IPL) that fetched Rs 9 billion and the cricket World Cup that is estimated to have got Rs 4 billion. Though the IPL will still play out this year, it is unlikely to get a major hike. Efforts are being made to push hockey but the increase will be from a very low base and would not make up for the cricket World Cup. Even the Olympics is a very small revenue earner for the sports broadcasters.

The T20 World Cup, to be held this year, will provide a cushion but only to some extent.

Says Vivaki Exchange executive VP Sejal Shah, "The ODI World Cup is a miss this year. The T20 World Cup will help to some extent. But the loss from sports will move to other genres chasing similar mass and male audiences."

Another issue is the current performance of the Indian team. "If India continues to perform badly, then yes ad spends will come down significantly. We will need to wait and watch what happens in the upcoming ODI and IPL formats," adds Shah.

For advertisers, the return on investment (ROI) is dependent on the audience that they want to chase and the objective of their campaigns. "If cost efficiency alone is the objective, then GECs (general entertainment channels) and news will be better ROI vehicles. If mass and male audiences are the objective, then there is nothing better than a cricket platform to establish the communication," states Shah.

Cricket still remains the best vehicle to cut across geographies and SECs for male skewed brands, she adds.

Madison Media Group CEO Punitha Arumugham agrees that cricket is no more a special programme but a part of the calendar for any major brand. However, if cricket is not performing, she cautions that there are enough opportunities on television and print. "Ratings is going to decide how much money people are going to put on it, and what cost they are going to pay for it. If cricket doesn‘t score, the money will go back to other mediums and digital," she says.

Cricket advertising depends a lot on non FMCG companies like telecom and automobiles. "In this economic scenario, non FMCG will spend slightly lesser this year. Automobile, because of their new launches, and telecom categories may still spend well. However in the current economic climate, the financial category and consumer durables are likely to lower down their spends," says Arumugham.

Due to their high costs, advertisers have been pressing for performance guarantee deals going forward. A media expert, however, feels that this is unlikely to happen unless there is a huge mismatch between what a channel is charging and what a client is willing to pay.

"A lot also depends on the state of the economy. If the economy turns for the better, then more brands will launch campaigns towards the latter part of the year," the expert opines.

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